Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Banc Corp
Banc Corp. Trust is considering either a bankwide overhead rate or department overhead rates to allocate $437,000 of indirect costs. The bankwide rate could be based on either direct labor hours (DLH) or the number of loans processed. The departmental rates would be based on direct labor hours for Consumer Loans and a dual rate based on direct labor hours and the number of loans processed for Commercial Loans. The following information was gathered for the upcoming period:
DepartmentDLHLoans ProcessedDirect CostsConsumer17,000 500 $290,000 Commercial6,000 400 $190,000
If Banc Corp. Trust uses a bankwide rate based on direct labor hours, what would be the indirect costs allocated to the Commercial Department?
Expert Solution
Computation of Indirect costs allocated to the Commercial Department:
Bank-wide Rate based on Direct Labor Hours = Total Indirect Costs / Total Direct Labour Hours
= $437,000 / (17,000+6,000)
= $437,000/23,000
= $19 per labor hour
Since the commercial department has 6000 labor hours
Indirect costs allocated to the Commercial Department = 6000 * 19 = $114,000
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
