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A company incurs $4,050,000 of overhead each year across three departments: Ordering and Receiving, Mixing, and Testing. The company prepares 2,000 purchase orders, works
A company incurs $4,050,000 of overhead each year across three departments: Ordering and Receiving, Mixing, and Testing. The company prepares 2,000 purchase orders, works 50,000 mixing hours, and performs 1,500 tests per year in producing 200,000 drums of product Goo and 600,000 drums of product Slime. The following data are available: Estimated Use of Activity Cost Pools Estimated OH Cost Driver Ordering and Receiving 2,000 $1,200,000 Mixing 50,000 1,500,000 Testing 1,500 1,350,000 Production information for product Goo is as follows: Activity Cost Pools Actual Driver Use Ordering and Receiving 400 Mixing 20,000 Testing 500 If ABC is used, what amount of overhead will be assigned to Goo?
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