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Question(s) / Instruction(s):

A company incurs $1,350,000 of overhead each year in three departments: Ordering and Receiving, Mixing, and Testing. The company prepares 2,000 purchase orders, works 50,000 mixing hours, and performs 1,500 tests per year in producing 200,000 drums of Goo and 600,000 drums of Slime. The following data are available:

Department                       Expected use of Driver  Cost

Ordering and Receiving 2,000                                     $400,000

Mixing                                  50,000                                   500,000

Testing                                 1,500                                     450,000

Production information for Goo is as follows:

Department                       Expected use of Driver                 

Ordering and Receiving                 400

Mixing                                                  20,000

Testing                                                 500

Compute the amount of overhead assigned to Goo.

A)           $337,500

B)            $430,000

C)            $527,382

D)           $675,000

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