Banc Corp Trust Is Considering Either a Bankwide Overhead Rate or or Department

question 133

Multiple Choice

Banc Corp. Trust is considering either a bankwide overhead rate or department overhead rates to allocate $396,000 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:
$$\begin{array} { l c c r } \text { Department } & \text { DLH } & \text { Loans Processed } & \text { Direct Costs } \\\text { Consumer } & 14,000 & 700 & \$ 280,000 \\\text { Commercial } & 8,000 & 300 & \$ 180,000\end{array}$$
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If Banc Corp. Trust uses a bankwide rate based on direct labor hours, what would be the indirect costs allocated to the Consumer Department?

• A) $49,000.
• B) $252,000.
• C) $198,000.
• D) $396,000.

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Definitions:

Loose Associations

A thought disorder characterized by disjointed thinking where the connection between thoughts is difficult to discern, often observed in schizophrenia.

Delusions

False beliefs held with conviction despite evidence to the contrary, often occurring as a symptom of psychiatric disorders.

Hallucinations

Perceptual experiences that occur without an external stimulus, often vivid and convincing, affecting various senses.

Concordance Rate

The statistical measure that indicates the likelihood of two individuals sharing a trait or disorder, often used in twin studies.