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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 cost used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Direct Costs $ 140,600 98,200 42,000 78,400 Proportion of Services Used by Quality Control Fabricating Repair 0 0.3 0.3 0 Required: Use the step method to allocate the service costs, using the following: 0.4 0.2 a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Finishing 0.3 0.5

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 cost used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Direct Costs $ 140,600 98,200 42,000 78,400 Proportion of Services Used by Quality Control Fabricating Repair 0 0.3 0.3 0 Required: Use the step method to allocate the service costs, using the following: 0.4 0.2 a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Finishing 0.3 0.5

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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: Department Fabricating Finishing Repair Quality Control Proportion of Services Used by Quality Control Direct Costs Repair $ 140,600 98,200 42,000 78,400 0 0.3 0.3 0 Fabricating Finishing Required: Use the step method to allocate the service costs, using the following: 0.4 0.2 a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). 0.3 0.5
Transcribed Image Text: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 Proportion of Services Used by Quality Control Direct Costs Repair $ 140,600 98,200 42,000 78,400 0 0.3 0.3 0 Fabricating Finishing Required: Use the step method to allocate the service costs, using the following: 0.4 0.2 a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). 0.3 0.5
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