Question
Banc Corporation Trust is considering either a bank-wide overhead rate or department overhead rates to allocate $410,000 of indirect costs. The bank-wide rate could be
Banc Corporation Trust is considering either a bank-wide overhead rate or department overhead rates to allocate $410,000 of indirect costs. The bank-wide 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:
| Department | DLH | Loans Processed | Direct Costs |
|---|---|---|---|
| Consumer | 14,000 | 650 | $ 250,000 |
| Commercial | 7,000 | 350 | $ 130,000 |
If Banc Corporation Trust uses a bank-wide rate based on the number of loans processed, what would be the total costs for the Consumer Department?
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Information Technology Auditing
Authors: Hall, J Scott Harr
3rd Edition
1133008046, 978-1439079119
