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