"Huntley Company has two departments, Machining and Assembly, at its Milwaukee plant. This year’s budget for the plant contained the following information."
	Machining	Assembly
Manufacturing overhead	$4,000,000	$2,000,000
Direct labor hours	100,000	200,000
Machine hours	410,000	40,000

"Assume the Milwaukee plant uses machine hours as the overhead base in machining and
direct labor in Assembly. If Job 2420 uses 20 direct labor hours in each department, 10
machines hours in Machining and 5 machine hours in Assembly, how much overhead would
be assigned to the job?"

Answer (B) is correct.
The machining department uses machine hours as its allocation base.
Thus, the machining allocation rate is equal to $100 per machine hour
($4,000,000 ÷ 40,000). The assembly department uses direct labor hours
as its allocation base. Thus, the assembly allocation rate is equal to $10
per direct labor hour ($2,000,000 ÷ 200,000).
Job 2420 uses 20 direct labor hours in assembly and 10 machine hours in
machining (the 5 machine hours used in assembly are distractors). This
job will be assigned $200 overhead from assembly ($10 Rate × 20 Direct
labor hours) and $1,000 overhead from machining ($100 Rate × 10
Machine hours) for a total overhead of $1,200 ($1,000 + $200).