FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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
Fabricating
Direct Costs Repair
$ 132,600
Quality
Control
Fabricating
Finishing
Finishing
94,200
Repair
40,200
0
0.2
0.5
0.3
Quality Control
75,000
0.8
0
0.1
0.1
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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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 $ 132,600 Quality Control Fabricating Finishing Finishing 94,200 Repair 40,200 0 0.2 0.5 0.3 Quality Control 75,000 0.8 0 0.1 0.1 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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