either a bankwide overheod rate or to alloo partment overhead rates to allocate

Question

either a bankwide overheod rate or to alloo partment overhead rates to allocate $410,000 of indirect costs. The ban or the number of leans processed. The departmental rates would.b Commercial Loans. The following information was gathered for the upcoming period onstimen Loans and a dual rate b 16.000oons Processed 7,000 550 100 Direct Costs $350,000 S250,000 Banc Corp. Trust estimates that 1 costs $500 allocated to the Consumer Department? to anolyze and close a commercial loan This amount has been inc ucied in the $410000 ofimdirekt cots, How much of the $410,00indirect costs should be O $210,000 O $60000 O $130,000. O $350.000

Explanation / Answer

Ans: Option C $130000

Solu: Overhead allocation to consumer Department = 410000 -(500*400)

                                                                                                 =210000

Per Loan Amount = 210000/(650+400)= $ 200 per loan

total Allocation =200*650 = $ 130000

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