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Sequential Method

Jasmine Company manufactures both pesticide and liquidfertilizer, with each product manufactured in separate departments.Three support departments support the production departments:Power, General Factory, and Purchasing. Budgeted data on the fivedepartments are as follows:

	Support Departments		ProducingDepartments
	Power	General Factory	Purchasing	Pesticide	Liquid Fertilizer
Overhead	$80,000	$316,000	$165,000	$78,500	$107,400
Square feet	1,500	—	1,500	4,200	4,800
Machine hours	—	1,403	1,345	24,000	8,000
Purchase orders	20	40	—	120	60

The company does not break overhead into fixed and variablecomponents. The bases for allocation are power—machine hours;general factory—square feet; and purchasing—purchase orders.

The company has decided to use the sequential method ofallocation instead of the direct method. The support departmentsare ranked in order of highest cost to lowest cost.

Required:

1. Allocate the overhead costs to the producingdepartments using the sequential method. Carry out allocationratios to four decimal places. Use these numbers for subsequentcalculations. Round allocated costs to the nearest dollar. If anamount is zero, enter "0".

Allocation ratios:

	Power	General Factory	Purchasing	Pesticide	Liquid Fertilizer
Square feet
Machine hours
Purchase orders

Cost allocation:

	Power	General Factory	Purchasing	Pesticide	Liquid Fertilizer
Direct costs	$	$	$	$	$
General Factory
Purchasing
Power
Total	$	$	$	$	$

2. Using machine hours, compute departmentaloverhead rates. (Round the overhead rates to the nearest cent.)

	Overhead Rates
Pesticide	$ per machine hour
Liquid Fertilizer	$ per machine hour