Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger

Exercise 45

( Appendix 5B ) Sequential Method of Support Department Cost Allocation
Refer to Exercise 5-44 for data. Now assume that Stevenson uses the sequential method to allocate support department costs to the operating divisions. General Factory is allocated first in the sequential method for the company.
Required:
1. Calculate the allocation ratios for Power and General Factory. ( Note : Carry these calculations out to four decimal places.)
2. Allocate the support service costs to the operating divisions. ( Note : Round all amounts to the nearest dollar.)
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. ( Note : Round overhead rates to the nearest cent.)