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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 Direct Costs Repair $ 139,600 108, 200 46,500 86,900 0 0.6 Proportion of Services Used by Quality Control Fabricating 0.2 0 Required: Use the step method to allocate the service costs, using the following: 0.6 0.1 a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Finishing 0.2 0.3

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 Direct Costs Repair $ 139,600 108, 200 46,500 86,900 0 0.6 Proportion of Services Used by Quality Control Fabricating 0.2 0 Required: Use the step method to allocate the service costs, using the following: 0.6 0.1 a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Finishing 0.2 0.3

FINANCIAL ACCOUNTING
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: Department Fabricating Finishing Repair Quality Control Required A Required B Direct Costs Repair Control $ 139,600 108, 200 46,500 86,900 Required: Use the step method to allocate the service costs, using the following: From: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Service department costs Repair Quality control Total costs allocated Proportion of Services Used by Quality 0.6 Complete this question by entering your answers in the tabs below. $ Repair 0.2 0 0 $ Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Fabricating Finishing Cost Allocation To: Quality Control 0.6 0.1 Fabricating 0 $ Finishing 0.2 0.3 0 $ 0
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 Required A Required B Direct Costs Repair Control $ 139,600 108, 200 46,500 86,900 Required: Use the step method to allocate the service costs, using the following: From: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Service department costs Repair Quality control Total costs allocated Proportion of Services Used by Quality 0.6 Complete this question by entering your answers in the tabs below. $ Repair 0.2 0 0 $ Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Fabricating Finishing Cost Allocation To: Quality Control 0.6 0.1 Fabricating 0 $ Finishing 0.2 0.3 0 $ 0
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