Johnson Manufacturing anticipates incurring $500,000 in overhead costs this year. After implementing activity-based costing (ABC), the company's controller identified the following related information:

Activity Allocation Base Proportion of Overhead Cost Purchasing Number of purchase orders 20% Machine setups Number of setups 15% Production Number of machine hours 65%

The number of activities expected is as follows:

Total number of purchase orders 4,000

Total number of setups 2,000

Total number of machine hours 10,000

Refer to the Johnson Manufacturing information above. How much total overhead will be allocated to the production activity?

Answers:	$500,000
	$325,000
	$ 10,000
	$312,500