Response to the following problem:
A company incurs $1,800,000 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:
Department Expected Use of Driver Cost
Processing 800 $750,000
Packaging 200,000 750,000
Testing 2,000 300,000
Production information for the two products is as follows:
Department Oil Expected Use of Driver Sludge
Expected Use of Driver Processing 300 500
Packaging 120,000 80,000
Testing 1,600 400
The amount of overhead assigned to Sludge is what?