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 Direct Costs Repair Quality Control Fabricating Finishing Fabricating $ 140,600 Finishing 98,200 Repair 42,000 0 0.3 0.4 0.3 Quality Control 78,400 0.3 0 0.2 0.5 Required: Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. Fill out the following table. Cost Allocation to From: Repair Quality Control Fabricating Finishing Service Department Costs Repair Quality Control Total Costs Allocated The allocations are made in the reverse order (starting with Quality Control). Fill out the following table. Cost Allocation to: From: Quality Control Repair Fabricating Finishing Service Department Costs Quality Control Repair Total Costs Allocated Total Costs Allocated
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 Direct Costs Repair Quality Control Fabricating Finishing Fabricating $ 140,600 Finishing 98,200 Repair 42,000 0 0.3 0.4 0.3 Quality Control 78,400 0.3 0 0.2 0.5 Required: Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. Fill out the following table. Cost Allocation to From: Repair Quality Control Fabricating Finishing Service Department Costs Repair Quality Control Total Costs Allocated The allocations are made in the reverse order (starting with Quality Control). Fill out the following table. Cost Allocation to: From: Quality Control Repair Fabricating Finishing Service Department Costs Quality Control Repair Total Costs Allocated Total Costs Allocated
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 | Direct Costs | Repair | Quality Control | Fabricating | Finishing |
| Fabricating | $ 140,600 | ||||
| Finishing | 98,200 | ||||
| Repair | 42,000 | 0 | 0.3 | 0.4 | 0.3 |
| Quality Control | 78,400 | 0.3 | 0 | 0.2 | 0.5 |
Required:
Use the step method to allocate the service costs, using the following:
-
The order of allocation starts with Repair. Fill out the following table.
| Cost Allocation to | ||||
| From: | Repair |
Quality Control |
Fabricating | Finishing |
| Service Department Costs | ||||
| Repair | ||||
| Quality Control | ||||
| Total Costs Allocated |
The allocations are made in the reverse order (starting with Quality Control). Fill out the following table.
| Cost Allocation to: |
|
|||
| From: | Quality Control | Repair | Fabricating | Finishing |
| Service Department Costs | ||||
| Quality Control | ||||
| Repair | ||||
| Total Costs Allocated | ||||
| Total Costs Allocated |
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