Sequential (Step) Method of Support Department Cost Allocation
Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.
Support Departments Producing Departments
Human
Resources General
Factory Fabricating Assembly
Direct costs $175,000 $400,000 $114,200 $98,000
Normal activity:
Number of employees — 60 80 170
Square footage 1,100 — 5,900 13,900
Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Valron Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost.
Required:
1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations.
Proportion of Driver Used by
Human Resources General Factory Fabricating Assembly
Human Resources
General Factory
2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar.
Support Departments Producing Departments
Human Resources General Factory Fabricating Assembly
Direct costs $ $ $ $
Allocate:
General Factory
Human Resources
Total after allocation $ $ $ $