Banc Corp. Trust is considering either a bankwide overhead rate or department overhead rates to allocate $368,000 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: Department DLH Loans Processed Direct Costs Consumer 15,000 850 $ 260,000 Commercial 8,000 150 $ 140,000 If Banc Corp. Trust uses a bankwide rate based on direct labor hours, what would be the indirect costs allocated to the Commercial Department? Multiple Choice $128,000. $125,600. $130,400. $140,000.

Banc Corp. Trust is considering either a bankwide overhead rate or department overhead rates to allocate $368,000 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: Department DLH Loans Processed Direct Costs Consumer 15,000 850 $ 260,000 Commercial 8,000 150 $ 140,000 If Banc Corp. Trust uses a bankwide rate based on direct labor hours, what would be the indirect costs allocated to the Commercial Department? Multiple Choice $128,000. $125,600. $130,400. $140,000.

EBK CFIN

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ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 12PROB

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TB MC Qu. 9-77 (Algo) Banc Corp. Trust is considering either a bankwide...

Department	DLH	Loans Processed	Direct Costs
Consumer	15,000		850	$	260,000
Commercial	8,000		150	$	140,000

If Banc Corp. Trust uses a bankwide rate based on direct labor hours, what would be the indirect costs allocated to the Commercial Department?

Multiple Choice

$128,000.
$125,600.
$130,400.
$140,000.

Definition Definition Operation costing method employed to determine the value of a product at each process or stage of the production process, applicable where goods produced from a series of continuous operations or procedure. Process costing is employed by businesses that manufacture goods and where production is in repetitive inflow.

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