Question
A company incurs $1210000 of overhead each year in three departments, Processing, Packaging, and Testing. The company performs 800 processing transactions, 210000 packaging transactions, and
A company incurs $1210000 of overhead each year in three departments, Processing, Packaging, and Testing. The company performs 800 processing transactions, 210000 packaging transactions, and 1800 tests per year in producing 405000 drums of oil and 592000drums of sludge. The following data are available:
| Department | Use of Cost Driver | Cost | |
|---|---|---|---|
| Processing | 800 | $510000 | |
| Packaging | 210000 | 510000 | |
| Testing | 1800 | 190000 | |
Production information for oil is as follows:
| Department | Use of Cost Driver | |
|---|---|---|
| Processing | 200 | |
| Packaging | 119000 | |
| Testing | 1800 | |
Calculate the amount of overhead assigned to oil.
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