Keep in note, fill in the blank is just where an answer is supposed to go

Sequential Method of Support Department Cost Allocation

Stevenson Company is divided into two operating divisions: Battery and Small Motors. The company allocates power and general factory costs to each operating division using the sequential method. General Factory is allocated first in the sequential method for the company. Support department cost allocations using the sequential method are based on the following data:

	Support Departments				Operating Divisions
	Power		General Factory		Battery		Small Motors
Overhead costs	$160,000		$430,000		$163,000		$84,600
Machine hours	2,000		2,000		8,500		2,500
Square footage	1,000		1,500		10,000		17,500
Direct labor hours					18,000		60,000

Required:

1. Calculate the allocation ratios for Power and General Factory. (Note: Carry these calculations out to four decimal places.)

Allocation ratios for General Factory

Power	fill in the blank 1
Battery	fill in the blank 2
Small Motors	fill in the blank 3

Allocation ratios for Power

Battery	fill in the blank 4
Small Motors	fill in the blank 5

2. Allocate the support service costs to the operating divisions. Round all amounts to the nearest dollar. Use a minus sign to indicate a subtraction. For those boxes in which no entry is required, leave the box blank or enter zero ("0").

Support Departments

Operating Divisions

Power

General Factory

Battery

Small Motors

Direct costs

$fill in the blank 6

$fill in the blank 7

$fill in the blank 8

$fill in the blank 9

Allocate:

General Factory

fill in the blank 10

fill in the blank 11

fill in the blank 12

fill in the blank 13

Power

fill in the blank 14

fill in the blank 15

fill in the blank 16

fill in the blank 17

Total

$fill in the blank 18

$fill in the blank 19

$fill in the blank 20

$fill in the blank 21

3. Assume divisional overhead rates are based on direct labor hours. Calculate the overhead rate for the Battery Division and for the Small Motors Division. Round overhead rates to the nearest cent.

Battery overhead rate	$fill in the blank 22
Small Motors overhead rate	$fill in the blank 23