Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair 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 $ 136,600 102,200 43,800 81,800 0 0.8 0.2 0 Fabricating Finishing 0.6 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). 0.2 0.1

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
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:
Department
Fabricating
Finishing
Repair
Quality Control
Required A
Required B
Direct Costs Repair
$ 136,600
102, 200
43,800
81,800
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
Complete this question by entering your answers in the tabs below.
$
$
Repair
Proportion of Services Used by
Quality
Control
0
0.8
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.
43,800 $
(43,800)
0
0
$
0.2
0
Fabricating Finishing
Cost Allocation To:
Quality
Control
81,800
8,760
(90,560)
0.6
0.1
Fabricating
0 $
26,280
26,280
$
0.2
0.1
Finishing
8,760
8,760
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 $ 136,600 102, 200 43,800 81,800 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 Complete this question by entering your answers in the tabs below. $ $ Repair Proportion of Services Used by Quality Control 0 0.8 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. 43,800 $ (43,800) 0 0 $ 0.2 0 Fabricating Finishing Cost Allocation To: Quality Control 81,800 8,760 (90,560) 0.6 0.1 Fabricating 0 $ 26,280 26,280 $ 0.2 0.1 Finishing 8,760 8,760
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