Sequential (Step) Method of Support Department CostAllocation

Valron Company has two support departments, Human Resources andGeneral Factory, and two producing departments, Fabricating andAssembly.

	Support Departments			Producing Departments
	Human Resources	General Factory		Fabricating	Assembly
Direct costs	$175,000	$350,000		$114,900	$99,000
Normal activity:
Number of employees	—	40		80	150
Square footage	1,400	—		5,900	13,000

Resources Department are allocated on the basis of number ofemployees, and the costs of General Factory are allocated on thebasis of square footage. Now assume that Valron Company uses thesequential method to allocate support department costs. The supportdepartments are ranked in order of highest cost to lowest cost.

Required:

1. Calculate the allocation ratios (rounded tofour significant digits) for the four departments using thesequential method. If an amount is zero, enter "0". Use the roundedvalues for subsequent calculations.

	Proportion of Driver Used by
	Human Resources	General Factory	Fabricating	Assembly
Human Resources
General Factory

2. Using the sequential method, allocate thecosts of the Human Resources and General Factory departments to theFabricating 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	$	$		$	$