2. 11.40 Company XSell has a processing department with 10 stations. Because of the nature and use of 3 of these stations, each is considered a separate cost center for IDC allocation. The remaining 7 are grouped as one cost center, CC150. Operating hours are used as the allocation basis for all stations. A total of $250,000 is allocated to the department for next year.

(a) Use the data collected this year to determine the IDC rate for each center.

(b) If accounting decides to use a blanket rate for all departments, determine the value of this rate. How does the blanket rate compare with the rates for CC100 and CC110 calculated previously? Table Summary: A table divided into 3 columns summarizes the IDC allocated to 4 cost centers. The column headers are marked as: Cost Center; IDC Allocated in dollars; and Operating Hours. Cost Center IDC Allocated, $ Operating Hours CC100 25,000 800 CC110 50,000 200 CC120 75,000 1200 CC150 100,000 1600