A Savings Trust uses bankwide 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 following information was gathered for the upcoming period Department DLH Loans Processed Direct Costs Consumer 14,000 700 $ 280,000 Commercial 8,000 300 $ 180,000 What would be the rate based on direct labor hour What would be the rate based on number of loans processed If Savings uses a rate based on direct labor hours, how much overhead will be allocated to the Consumer department If Savings uses a rate based on number of loans processed, how much overhead will be allocated to the Consumer department B Foster Corporation applies overhead using a normal costing approach based upon machine hours Budgeted factory overhead was $266,400, budgeted machine hours were 18,500 Actual factory overhead was $287,920, actual machine hours were 19,050 How much is the over or underapplied overhead Be sure to say whether overhead is overapplied or underapplied

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 11, 2024

A. Savings Trust uses bankwide overhead rates to allocate $396,000 of indirect costs. The bankwide rate could be based on either direct labor hours (DLH)

A. Savings Trust uses bankwide 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 following information was gathered for the upcoming period:

Department	DLH	Loans Processed	Direct Costs
Consumer	14,000	700		$	280,000
Commercial	8,000	300		$	180,000

What would be the rate based on direct labor hour?
What would be the rate based on number of loans processed?
If Savings uses a rate based on direct labor hours, how much overhead will be allocated to the Consumer department?
If Savings uses a rate based on number of loans processed, how much overhead will be allocated to the Consumer department.

Foster Corporation applies overhead using a normal costing approach based upon machine-hours. Budgeted factory overhead was $266,400, budgeted machine-hours were 18,500. Actual factory overhead was $287,920, actual machine-hours were 19,050. How much is the over- or underapplied overhead? Be sure to say whether overhead is overapplied or underapplied.