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 cost used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Direct Costs $ 140,600 98,200 42,000 78,400 Proportion of Services Used by Quality Control Fabricating Repair 0 0.3 0.3 0 Required: Use the step method to allocate the service costs, using the following: 0.4 0.2 a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Finishing 0.3 0.5
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 cost used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Direct Costs $ 140,600 98,200 42,000 78,400 Proportion of Services Used by Quality Control Fabricating Repair 0 0.3 0.3 0 Required: Use the step method to allocate the service costs, using the following: 0.4 0.2 a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Finishing 0.3 0.5
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 8E: A manufacturing company has two service and two production departments. Building Maintenance and...
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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:
Department
Fabricating
Finishing
Repair
Quality Control
Proportion of Services Used by
Quality
Control
Direct Costs Repair
$ 140,600
98,200
42,000
78,400
0
0.3
0.3
0
Fabricating Finishing
Required:
Use the step method to allocate the service costs, using the following:
0.4
0.2
a. The order of allocation starts with Repair.
b. The allocations are made in the reverse order (starting with Quality Control).
0.3
0.5
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