QUESTION 1 Johnstone Company manufactures two products, Board 12 and Case 165. Johnstone's overhead costs consist of setting up machines, $1,200,000, machining $2,700,000; and inspecting, $900,000. Information on the two products is: Board 12 Case 165 Direct labor hours 15,000 25,000 Machine setups 600 400 Machine hours 24,000 26,000 Inspections 800 700 Overhead applied to Case 165 using activity based costing is $1,920,000 $2,304,000 $2,496,000. $3,000,000