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

question 98

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:
$$\begin{array} { l c c r } \text { Department } & \text { DLH } & \text { Loans Processed } & \text { Direct Costs } \\\text { Consumer } & 14,000 & 700 & \$ 280,000 \\\text { Commercial } & 8,000 & 300 & \$ 180,000\end{array}$$
-
If Banc Corp. Trust uses a bankwide rate based on the number of loans processed, what would be the total costs for the Commercial Department?

• A) $118,800.
• B) $180,000.
• C) $298,800.
• D) $318,000.

---

Definitions:

Policy Action

A deliberate action taken by a government or other organization to influence economic, social, or environmental outcomes.

Domestic Supply

The sum of all products and services made within a nation, ready for use domestically or for sending abroad.

Domestic Demand

The total demand for goods and services within a country, including demand from both consumers and businesses.

World Price

The price of a good or service on the international market, influenced by global supply and demand conditions.