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 $ 149,600 Finishing 112,200 Repair 48,300 0 0.2 0.6 0.2 Quality Control 90,300 0.8 0 0.1 0.1 Required: Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. The allocations are made in the reverse order (starting with Quality Control).
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 $ 149,600 Finishing 112,200 Repair 48,300 0 0.2 0.6 0.2 Quality Control 90,300 0.8 0 0.1 0.1 Required: Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. The allocations are made in the reverse order (starting with Quality Control).
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 | $ 149,600 | ||||
| Finishing | 112,200 | ||||
| Repair | 48,300 | 0 | 0.2 | 0.6 | 0.2 |
| Quality Control | 90,300 | 0.8 | 0 | 0.1 | 0.1 |
Required:
Use the step method to allocate the service costs, using the following:
- The order of allocation starts with Repair.
- The allocations are made in the reverse order (starting with Quality Control).
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