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

question 107

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: $\begin{array}{lcr}\text { Department }&\text {Expected Use of Driver}&\text { Cost }\\\text { Processing } & 800 & \$ 1,500,000 \\\text { Packaging } & 200,000 & 1,500,000 \\\text { Testing } & 2,000 & 600,000\end{array}$

$\text { Production information for the two products is as follows: }$

$\begin{array}{lcc}&\text {Oil }&\text {Sludge }\\\text { Department}&\text { Expected Use of Driver}&\text { Expected Use of Driver }\\\hline\text { Processing } & 300 & 500 \\\text { Packaging } & 120,000 & 80,000 \\\text { Testing } & 1,600 & 400\end{array}$ 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.

---

Definitions:

Western

Refers broadly to the sociocultural, political, or educational systems and practices associated with Europe and the Americas, often contrasted with Eastern traditions.

Biomedical

Pertaining to the application of the natural sciences, especially biology and physiology, to clinical medicine.

Correspondence

Communication by exchanging letters, emails, or other forms of messaging, usually between individuals or organizations.

Cultural Competence

The ability to understand, appreciate, and interact effectively with people of different cultures and socio-economic backgrounds.