26 A manufacturing company has two divisions: Division A and Division B. The company has used a traditional overhead allocation method based on direct labor hours. For the most recent year, the predetermined overhead rate was $40 per direct labor hour. In considering an activity-based costing system, three cost drivers and overhead cost pools have been identified. Data about the cost drivers for the most recent year is given below: Cost drivers Number of events per year Cost Pool X Y 1,200 500 20 Total Z $100,000 $ 75,000 $ 60,000 $240,000 The following data relate to cost driver event activity within the two divisions during the most recent year: Division A Division B Total Cost Driver X events 700 300 1,000 Cost Driver Y events 100 400 500 Cost Driver Z events 12 8 20 Direct Labor Hours 5,000 1,000 6,000 Using activity-based costing, what amount of overhead will be allocated to Division B? $40,000 O $118,000 $120,000 O $122,000