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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 Direct Costs $ 149,600 112,200 48,300 90,300 Maximum Amount 0 Proportion of Services Used by Quality Fabricating Repair Control 0.3 0.3 0 Finishing 0.6 0.1 0.1 0.6 Mack Precision Tool and Die estimates that the variable costs in the Repair Department total $15,225, and in Quality Control variable costs total $39,200. Avoidable fixed costs in the Repair Department are $12,400. Required: If Mack Precision Tool and Die outsources the Repair Department, what is the maximum it can pay an outside vendor without Increasing total costs? Note: Do not round intermediate calculations.

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 Direct Costs $ 149,600 112,200 48,300 90,300 Maximum Amount 0 Proportion of Services Used by Quality Fabricating Repair Control 0.3 0.3 0 Finishing 0.6 0.1 0.1 0.6 Mack Precision Tool and Die estimates that the variable costs in the Repair Department total $15,225, and in Quality Control variable costs total $39,200. Avoidable fixed costs in the Repair Department are $12,400. Required: If Mack Precision Tool and Die outsources the Repair Department, what is the maximum it can pay an outside vendor without Increasing total costs? Note: Do not round intermediate calculations.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 5E: Crystal Scarves Co. produces winter scarves. The scarves are produced in the Cutting and Sewing...
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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 Direct Costs $ 149,600 112,200 48,300 90,300 Maximum Amount Proportion of Services Used by Quality 0 0.3 Fabricating Repair Control 0.3 0 Finishing 0.6 0.1 0.1 0.6 Mack Precision Tool and Die estimates that the variable costs in the Repair Department total $15,225, and in Quality Control variable costs total $39,200. Avoidable fixed costs in the Repair Department are $12,400. Required: If Mack Precision Tool and Die outsources the Repair Department, what is the maximum it can pay an outside vendor without Increasing total costs? Note: Do not round intermediate calculations.
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 Direct Costs $ 149,600 112,200 48,300 90,300 Maximum Amount Proportion of Services Used by Quality 0 0.3 Fabricating Repair Control 0.3 0 Finishing 0.6 0.1 0.1 0.6 Mack Precision Tool and Die estimates that the variable costs in the Repair Department total $15,225, and in Quality Control variable costs total $39,200. Avoidable fixed costs in the Repair Department are $12,400. Required: If Mack Precision Tool and Die outsources the Repair Department, what is the maximum it can pay an outside vendor without Increasing total costs? Note: Do not round intermediate calculations.
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