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E7-21 Sequential Method and Support Department Allocations

Jasmine Company has decided to use the sequential method of allocation instead of the direct method. The support departments are ranked in order of highest cost to lowest cost.

1. Allocate the overhead costs to the producing departments using the sequential method.

2. Using machine hours, compute departmental overhead rates.

Support Production
Power Gen Fact Purch Pest L. Fert Total
OH $90,000 $314,000 $167,000 $78,900 $107,800
sq ft 1,500 1,500 4,200 4,800 9,000
mach hr 1,403 1,345 24,000 8,000 32,000
orders 20 40 7 120 60 180
allocation base mach hr sq feet orders

Solution Summary

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