Mena Corporation Has Two Production Departments,Assembly and Finishing and Three

question 116

Essay

Mena Corporation has two production departments,Assembly and Finishing and three service departments,Personnel,Maintenance,and Cafeteria.Data relevant to Mena are:
Assembly and Finishing work on two jobs during the month: Job 100 and 101.Costs are allocated to jobs based on machine hours in assembly and labor hours in Finishing.The machine and labor hours worked in each department are as follows:
$$\begin{array} { | l | l | c | c | } \hline & & \text { Assembly } & \text { Finishing } \\\hline \text { Job } 100 & \text { Labor Hours } & 200 & 800 \\\hline & \text { Machine Hours } & 1,000 & 200 \\\hline \text { Job } 101 & \text { Labor Hours } & 100 & 900 \\\hline & \text { Machine Hours } & 500 & 100 \\\hline\end{array}$$ Required:
Determine the amount of service department costs to be allocated to Jobs 100 and 101.Mena allocates service department costs to production departments using the direct-method of allocation.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the efficiency of a company in managing its production and labor costs.

Inventory Valuation

A method used to calculate the cost of goods sold and the end inventory balance, involving techniques such as FIFO, LIFO, and weighted average cost.

Consignor

A person or company that sends goods to a consignee to be sold or returned, retaining ownership until sale.

Consignee

The party to whom goods are shipped and held in trust until they are sold, at which point payment is made to the consignor.