Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair
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Question:
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 | $ 140,600 | ||||
Finishing | 98,200 | ||||
Repair | 42,000 | 0 | 0.3 | 0.4 | 0.3 |
Quality Control | 78,400 | 0.3 | 0 | 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).
|
From: Cost Allocation To: Quality Control Repair Fabricating Finishing Service department costs $78,400 $42,000 Quality control (78,400) 23,520 Repair (65,520) Total costs allocated $0 $0 $0 $0
Related Book For
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd Canadian edition
Authors: Leslie G. Eldenburg, Susan Wolcott, Liang-Hsuan Chen, Gail Cook
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