Question
Please show me how to solve this step by step! A company incurs $3720000 of overhead each year in three departments: Processing, Packaging, and Testing.
Please show me how to solve this step by step!
A company incurs $3720000 of overhead each year in three departments: Processing, Packaging, and Testing. The company performs 800 processing transactions, 200000 packaging transactions, and 2000 tests per year in producing 400000 drums of Oil and 600000 drums of Sludge. The following data are available:
Department Expected Use of Driver Cost
Processing 800 $1560000
Packaging 200000 1560000
Testing 2000 600000
Production information for the two products is as follows:
Oil Sludge
Department Expected Use of Driver Expected Use of Driver
Processing 300 500
Packaging 120000 80000
Testing 1600 400
The amount of overhead assigned to Oil using ABC is
$2001000.
$1719000.
$1860000.
$1440000.
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