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ZZ, Inc. operates three service departments, repair, administration, and power along with two production departments, cutting and assembly. Service department costs are allocated to the
ZZ, Inc. operates three service departments, repair, administration, and power along with two production departments, cutting and assembly. Service department costs are allocated to the production departments using a sequential two-stage allocation method. The service department costs are allocated using the following activities: Repair allocated on the basis of maintenance hours Administration - allocated on the basis of number of employees Power allocated on the basis of kilowatt hours In the second stage, departmental overhead rates for the two production departments are calculated using machine hours as the cost driver for the cutting department and direct labor hours as the cost driver for the assembly department. Information for the three service departments is given below: Directly trace overhead Number of employees Maintenance hours Kilowatt hours Repair $128,000 20 6,000 12,000 Admin 80,000 15 36,000 32,000 Power $180,000 30 30,000 15,000 Information for the two production departments is given bel Directly trace overhead Number of employees Maintenance hours Kilowatt hours Direct labor hours Machine hours Cutting $322,000 28 9,000 20,000 10,000 15,000 Assembly $270,000 12 15,000 16,000 35,000 25,000 The company started and completed job #17 during the most recent month. Information about job #17 appears below: Job #17 Direct labor hours in cutting Direct labor hours in assembly Machine hours in cutting Machine hours in assembly 180 520 260 340 Calculate the total amount of overhead cost applied to Job #17
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