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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:
- 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.
- Based on the rates computed in requirement(a), what is the expected surplus (revenues less costs) for each center?
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