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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

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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 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 $150,000 2e 6,000 5,800 Admin $90,eee 15 28,888 20,000 Power $120,000 30 3e, eee 15,eee Information for the two production departments is given below: Directly trace overhead Number of employees Maintenance hours Kilowatt hours Direct labor hours Machine hours Cutting $300,000 12 18,000 24,000 10,689 15,000 Assembly $200,000 28 32,eee 6,800 25,089 20,880 Direct labor workers in both the cutting and the assembly departments are paid $15 per hour. Information for the three service departments is given below: Directly trace overhead Number of employees Maintenance hours Kilowatt hours Repair $150,000 20 6,800 5,000 Admin $90, eee 15 20,000 20,000 Power $120, eee 30 30,000 15,000 Information for the two production departments is given below: Directly trace overhead Number of employees Maintenance hours Kilowatt hours Direct labor hours Machine hours Cutting $300,000 12 18,000 24,000 10,000 15,000 Assembly $200,000 28 32,eee 6,000 25,000 20,000 Direct labor workers in both the cutting and the assembly departments are paid $15 per hour. The company started and completed job #17 during the most recent month. Information about job #17 appears below: Direct labor hours in cutting Direct labor hours in assembly Machine hours in cutting Machine hours in assembly Total direct material cost Units in the job Units sold during most recent month Job 317 100 see 200 300 $8,000 250 175 zz, Inc. sets the selling prices of its products at 175% of manufacturing cost. Calculate the amount of gross profit zz, Inc. earned on the sale of the 175 units from job #17

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