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 Required: Proportion of Services Used by Quality Direct Costs Repair Control Fabricating Finishing $ 140,600 98,200 42,000 78,400 0.3 0.4 0.3 0.2 0.5 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. From: Repair Cost Allocation To: Quality Control 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 Required: Proportion of Services Used by Quality Direct Costs Repair Control Fabricating Finishing $ 140,600 98,200 42,000 78,400 0.3 0.4 0.3 0.2 0.5 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. From: Repair Cost Allocation To: Quality Control Fabricating Finishing
Chapter1: Financial Statements And Business Decisions
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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
$ 140,600
Repair
Quality
Control
Fabricating
Finishing
Finishing
98,200
Repair
42,000
Ө
0.3
0.4
0.3
Quality Control
78,400
0.3
Ө
0.2
8.5
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.
Cost Allocation To:
Quality
From:
Repair
Control
Fabricating
Finishing
Service department costs
Repair
Quality control
Total
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