Question

Sequential Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Support Departments Producing Departments General Factory Receiving Assembly Finishing Direct overhead $500,000 $170,000 $45,000 $75,000 Square footage — 2,700 5,400 5,400 Number of receiving orders 300 — 1,680 1,020 Direct labor hours — — 25,000 40,000 The support departments are ranked in order of highest cost to lowest cost. Required: 1. Allocate the costs of the support departments using the sequential method. (Use the rounded values for subsequent calculations. Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar. If an amount is zero, enter "0".) Allocation ratios: General Factory Receiving Assembly Finishing Square footage fill in the blank 1 fill in the blank 2 fill in the blank 3 fill in the blank 4 Number of receiving orders fill in the blank 5 fill in the blank 6 fill in the blank 7 fill in the blank 8 Allocations: General Factory Receiving Assembly Finishing Direct overhead cost $fill in the blank 9 $fill in the blank 10 $fill in the blank 11 $fill in the blank 12 Allocate: General Factory fill in the blank 13 fill in the blank 14 fill in the blank 15 fill in the blank 16 Receiving fill in the blank 17 fill in the blank 18 fill in the blank 19 fill in the blank 20 Total $fill in the blank 21 $fill in the blank 22 $fill in the blank 23 $fill in the blank 24 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.) Overhead Rate Assembly fill in the blank 25 per direct labor hour Finishing fill in the blank 26 per direct labor hour

Answer 1

1)
	General factory	Receiving	Assembly	Finishing
Square footage ( 2,700 + 5,400 + 5,400 = 13,500		0.2 ( 2,700 / 13,500)	0.4 ( 5,400 / 13,500)	0.4 ( 5,400 / 13,500)
Number of receiving orders ( 1,680 + 1,020 = 2,700 )			0.6222 ( 1,680 / 2,700)	0.3778 ( 1,020 / 2,700 )
Allocations:
	General Factory	Receiving	Assembly	Finishing
Direct overhead cost	$ 500,000	$ 170,000	$ 45,000	$ 75,000
Allocate:
General Factory       ( 0.2 : 0.4 : 0.4 )	($ 500,000)	$ 100,000	$ 200,000	$ 200,000
Receiving       ( 0.6222 : 0.3778 )		($ 270,000)	$ 167,994	$ 102,006
Total	$ 0	$ 0	$ 412,994	$ 377,006
2)
Overhead Rate
Assembly ( $ 412,994 / 25,000 DLH )	$ 16.52	per direct labor hour
Finishing ( $ 377,006 / 40,000 DLH )	$ 9.43	per direct labor hour