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A company incurs $1300000 of overhead each year in three departments, Processing, Packaging, and Testing. The company performs 1000 processing transactions, 200000 packaging transactions, and 1800 tests per year in producing 400000 drums of oil and 598000 drums of sludge.
The following data are available:
Department Expected use of Driver Cost
Processing 1000 $502000
Packaging 200000 502000
Testing 1800 296000
Production information for oil is as follows:
Department Expected use of Driver
Processing 300
Packaging 124000
Testing 1800
Question 1: Calculate the amount of overhead assigned to oil.
$650000
$757840
$542160
$607240
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