Practice: Traditional Costing A company incurs $1,200,000 of overhead each year in three departments, Processing, Packaging, and Testing. The company performs 800 processing transactions, 200,000 packaging transactions, and 2,000 tests per year in producing 400,000 drums of oil and 600,000 drums of sludge. The following data are available: Department Expected use of Driver Cost Processing 800 $500,000 Packaging 200,000 500,000 Testing 2,000 200,000 Production information for sludge is as follows: Department Expected use of Driver Processing 500 Packaging 80,000 Testing 400 Using traditional costing on the basis of the number of packaging transactions, determine the amount of overhead allocated to oil