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eBook (Appendix 4B) 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 General Small Power Factory Battery Motors Overhead costs $160,000 $430,000 5163,000 584,600 Machine hours 2.000 2,000 7,500 3,000 Square footage 1,000 1,500 5,000 20,000 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 Battery Small Motors Allocation ratios for Power INC Battery Small Motors Allocation ratios for Power Battery Small Motors 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 ("O"). Support Departments Operating Divisions Small Power General Factory Battery Motors Direct costs Allocate: General Factory Power Total 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 Small Motors overhead rate

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