Banc CorpTrust Is Considering Either a Bankwide Overhead Rate or Department

question 77

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:
$$\begin{array} { | l | l | l | r | } \hline \text { Department } & \text { DLH } & \text { Loans Processed } & \text { Direct Costs } \\\hline \text { Consumer } & 14,000 & 700 & \$ 280,000 \\\hline \text { Commercial } & 8,000 & 300 & \$ 180,000 \\\hline\end{array}$$
Banc Corp.Trust estimates that it costs $400 to analyze and close a commercial loan.What is the overhead rate if Banc Corp.Trust allocates the remaining indirect costs using direct labor hours?

• A) $12.55 per hour.
• B) $18.00 per hour.
• C) $1,000 per loan.
• D) $800 per loan.

Compare the effectiveness of taxes and environmental standards in controlling pollution.

Identify the elements and benefits of tradable pollution permits in environmental policy.

Understand the calculation and implications of setting taxes on pollutants for businesses and their effects on the supply of products.

Distinguish between the concepts of tradable emissions permits and emissions taxes.

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Definitions:

Consumer Price Index

An index that measures the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.

Substitutes

Products that serve similar purposes. An increase in the price of one will cause an increase in demand for the other (examples are hamburgers and tacos, butter and margarine, Chevrolets and Fords).

Cable TV

is a system of delivering television programming to consumers via radio frequency signals transmitted through coaxial cables.

Satellite TV

A television system that delivers programming to viewers by broadcasting from a communications satellite orbiting the Earth directly to the viewer's location.