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Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. Data for the expected operation in the next quarter follow. Eastside

Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. Data for the expected operation in the next quarter follow.

Eastside Westside Total
Clients 25,000 6,250 31,250
Revenues $ 480,000 $ 320,000 $ 800,000
Staff hours 8,100 2,700 10,800
Staff costs $ 99,000 $ 144,000 $ 243,000
General operating costs $ 480,000

Required:

  1. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses thenumber of clientsto allocate general operating costs.
  2. Based on the rates computed in requirement(a), what is the expected surplus (revenues less costs) for each center?

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