A Company Incurs $3,600,000 of Overhead Each Year in Three

question 148

Multiple Choice

A company incurs $3,600,000 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: $$\begin{array}{l}\begin{array} { l c r } \text { Department } & \text { Expected Use of Driver } & { \text { Cost } } \\\text { Processing } & 800 & \$ 1,500,000 \\\text { Packaging } & 200,000 & 1,500,000 \\\text { Testing } & 2,000 & 600,000\end{array}\\\text { Production information for the two products is as follows: }\\\\\begin{array}{ll}&\text { Oil }&\text { Sludae }\\\text { Department }&\text { Expected Use of Driver }&\text { Expected Use of Driver }\\\hline \text { Processing } & 300 & 500 \\\text { Packaging } & 120,000 & 80,000 \\\text { Testing } & 1,600 & 400\end{array}\end{array}$$ The amount of overhead assigned to Oil using ABC is

• A)$1,800,000.
• B)$1,942,500.
• C)$1,657,500.
• D)$1,380,000.

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Definitions:

Free Association

An approach in psychoanalysis where the patient expresses thoughts openly and without filtering to uncover the workings of the unconscious mind.

Hypnosis

A focused state resembling trance, characterized by heightened suggestibility, commonly utilized for therapeutic goals.

Projective Tests

Psychological assessments where subjects respond to ambiguous stimuli, revealing hidden emotions, desires, and conflicts.

Repressed Memories

Memories of traumatic events unconsciously blocked from conscious awareness, often considered to be a defense mechanism.