Please Explain

Addison Manufacturing Company manufactures two products, Regular and Supreme. Addison's overhead costs consist of machining, $2,000,000; and assembling, $1,000,000. Information on the two products is:

Regular Supreme

Direct labor hours 10,000 15,000

Machine hours 10,000 30,000

Number of parts 90,000 160,000

Overhead applied to Regular using traditional costing using direct labor hours is

$860,000.

$1,200,000.

$1,800,000.

$2,140,000.