Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair andQuality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month ofMarch follow:DepartmentFabricatingFinishingRepairQuality ControlFrom:Direct Costs$ 140,60098, 200Service department costsRepairQuality controlTotal42,00078,400RepairRepair00.3Proportion of Services Used byQualityControlFabricating0.30Required:Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.)Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.Cost Allocation To:QualityControl0.40.2FinishingFabricating0.30.5Finishing

The various methods for cost allocation are direct, step and reciprocal method. Using reciprocal…

Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control From: Service department costs Direct Costs Repair Control $ 140,600 98, 200 42,000 78,400 Proportion of Services Used by Quality 0 0.3 Repair 0.3 0 Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Fabricating Finishing Quality Control Cost Allocation To: 0.4 0.2 0.3 0.5 Fabricating Finishing

Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control From: Service department costs Direct Costs Repair Control $ 140,600 98, 200 42,000 78,400 Proportion of Services Used by Quality 0 0.3 Repair 0.3 0 Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Fabricating Finishing Quality Control Cost Allocation To: 0.4 0.2 0.3 0.5 Fabricating Finishing

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Proportion of Services Used by Department Fabricating Direct Costs Repair $ 132,600 Quality Control Fabricating Finishing Finishing 94,200 Repair 40,200 0 0.2 0.5 0.3 Quality Control 75,000 0.8 0 0.1 0.1 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control).
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Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Proportion of Services Used by Department Fabricating Direct Costs Repair $ 134,600 Quality Control Fabricating Finishing Finishing 98,200 Repair Quality Control 42,000 78,400 0 0.2 0.5 0.3 0.6 0 0.2 0.2 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Complete this question by entering your answers in the tabs below. Required A Required B Use the step method to allocate the service costs, using the following: The allocations are made in the reverse order (starting with Quality Control). Note: Amounts to be deducted should be indicated by a minus sign. Do…
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