Belami Company manufactures both shampoo and conditioner, with each product manufactured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows:
Support Departments Producing Departments
Power General
Factory Purchasing Shampoo Conditioner
Overhead $80,000 $316,000 $169,000 $78,500 $107,400
Square feet 3,000 — 3,000 9,600 8,400
Machine hours — 1,403 1,345 8,000 24,000
Purchase orders 20 40 — 60 120
The company does not break overhead into fixed and variable components. 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 of allocation instead of the direct method. The support departments are ranked in order of highest cost to lowest cost.
Required:
1. Allocate the overhead costs to the producing departments using the sequential method. Carry out allocation ratios to four decimal places. Use these numbers for subsequent calculations. Round allocated costs to the nearest dollar. If an amount is zero, enter "0".
Allocation ratios:
Power General Factory Purchasing Shampoo Conditioner
Square feet fill in the blank 1
fill in the blank 2
fill in the blank 3
fill in the blank 4
fill in the blank 5
Machine hours fill in the blank 6
fill in the blank 7
fill in the blank 8
fill in the blank 9
fill in the blank 10
Purchase orders fill in the blank 11
fill in the blank 12
fill in the blank 13
fill in the blank 14
fill in the blank 15
Cost allocation:
Power General Factory Purchasing Shampoo Conditioner
Direct costs $fill in the blank 16
$fill in the blank 17
$fill in the blank 18
$fill in the blank 19
$fill in the blank 20
General Factory fill in the blank 21
fill in the blank 22
fill in the blank 23
fill in the blank 24
fill in the blank 25
Purchasing fill in the blank 26
fill in the blank 27
fill in the blank 28
fill in the blank 29
Power fill in the blank 30
fill in the blank 31
fill in the blank 32
Total $fill in the blank 33
$fill in the blank 34
$fill in the blank 35
$fill in the blank 36
$fill in the blank 37
2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.)
Overhead Rates
Shampoo $fill in the blank 38
per machine hour
Conditioner $fill in the blank 39
per machine hour
