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:

Overhead Cost Variance

The difference between the actual overhead incurred and the overhead that was expected or budgeted.

Management By Exception

A management strategy where leadership steps in only when performance deviates significantly from standards, focusing on the exceptions rather than routine operations.

Price Variance

The difference between the actual price paid for something and its standard or expected price, often analyzed in cost accounting.

Quantity Variance

The difference between the expected and actual quantity of materials used in production, reflecting efficiency in material usage.