Banc Corporation Trust is considering either a bank-wide overhead rate or department overhead rates to allocate $398,000 of indirect costs. The bank-wide rate could be based on either direct labor-hours (DLH) orthe 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 CommercialLoans. The following information was gathered for the upcoming period:DepartmentConsumerCommercialMultiple ChoiceOHow much of the $398,000 indirect costs should be allocated to the Consumer Department, if Banc Corporation Trust uses a bank-wide rate based on the number of loans processed?Note: Round the bank-wide rate to the nearest dollar.OO$298,000$298.500$290,000DLH18,0006,000$108,000LoansProcessed750250Direct Costs$ 290,000$ 170,000

The following relevant information has been provided,Indirect cost = $398,000Allocation basis =…

Answered: Banc Corporation Trust is considering…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 9EB: The cost data for BC Billing Solutions for the year 2020 is as follows: Using the high-low method,...

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The cost data for BC Billing Solutions for the year 2020 is as follows: Using the high-low method, express the companys overtime wages as an equation where x represents number of invoices processed. Assume BC has monthly fixed costs of $3,800. Predict the overtime wages if 9,000 invoices are processed. Predict the overtime wages if 6,500 invoices are processed. Using Excel, create a scatter graph of the cost data and explain the relationship between the number of invoices processed and overtime wage expense.
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
In 2020 the budget for a machine shop showed overheads of $60,000 and volume of activity of12,000 machine hours.In January of 2020, the machine shop incurred $5,400 of overhead and 1,050 machine hourswere worked. Required:a. Determine:i. The predetermined absorption rate. ii. The under/over absorption rate. b. With the use of calculation, explain the factors that contributed to the under/over absorptionof overheads.
R&R Savings Bank finds that its basic transaction account, which requires a $1000 minimum balance, costs this savings bank an average of $3.25 per month in servicing costs (including labor and computer time) and $1.25 per month in overhead expenses. The savings bank also tries to build in a $0.50 per month profit margin on these accounts. Further analysis of customer accounts reveals that for each $100 above the $500 minimum in average balance maintained in its transaction accounts, R&R Savings saves about 5 percent in operating expenses with each account. (Note: If the bank saves about 5 percent in operating expenses for each $100 held in balances above the $500 minimum, then a customer maintaining an average monthly balance of $1,000 should save the bank 25 percent in operating costs) For a customer who consistently maintains an average balance of $1,200 per month, how much should the bank charge in order to protect its profit margin? 05.00 4.68 O 0.32 325
Provide answers along with the calculation.
Marvel Bank & Trust operates in a very competitive marketplace, using a traditional labor-hour-based system to determine the cost of processing its mortgage loans. Recently, the firm explored a switch to activity-based costing to determine the wisdom of its previous ways. The following information is available: Activity Cost Drive Driver Units Application processing $900,000 Applications 4,000 Loan underwriting 800,000 Underwriting hours 16,000 Loan closure 880,000 Legal hours 8,000 Total $2,580,000 Two loan applications, among many others, were originated and closed during the year. No. 7439 consumed 3.5 hours in loan underwriting and 1.5 hours in loan closure, for a total of 5.0 hours. No. 7809 also required 5.0 hours of time, subdivided as follows: 2.0 hours in loan underwriting and 3.0 hours in loan closure. Required:A. Use an activity-based-costing system and determine the cost of processing, underwriting, and closing…
National Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,10), utilities ($2,000), special telephone lines ($1,500), a connection with an online brokerage service ($2,500), and the salary of a finanical planner ($5,200). Variable costs include payments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). REQUIREMENTS :Use the contribution margin ratio approach to compute National's breakeven revenue in dollars. If the average trade leads to $1,000 in revenue for National, how manhy trades must be made to break even? :Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $12,600. :Graph national's CVP relationships. Assume that an average trade leads to $1,000 in revenue for National. Show the breakeven point, the sales revenue line, the fixed cost…
Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $770,000 and $500,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 17,000 hours and 5,000 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.) A. $29.41 per labor hour B. $1.54 per labor hour C. $154.00 per machine hour D. $100.00 per machine hour
Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $760,000 and $500,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 16,000 hours and 5,000 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.) OA. $1.52 per labor hour OB. $100.00 per machine hour OC. $152.00 per machine hour O D. $31.25 per labor hour
Assume that you are one of the owners of Pinoy Corporation. Upon reviewing the project income statements as shown in Tables 7.3 and 7.4 you realized that salaries are understated because it only accounts for the 12 months of salary of each employee and does not include the 13th month pay, which is required by law. You also feel that cost of goods sold ought to be computed at 45% instead of 40% of salles revenues. Using a spreadsheet program, revise the projected income statements for the first year and the first three years of the business.
A company estimates its manufacturing overhead will be $525,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? When required, round your answers to nearest cent. A. Budgeted direct labor hours: 42,000 per direct labor hour B. Budgeted direct labor expense: $1,050,000 per direct labor dollar C. Estimated machine hours: 70,000 per machine hour
Diversified Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,800), depreciation on office furniture ($2,000), utilities ($2,100), special telephone lines ($1,500), a connection with an online brokerage service ($2,700), and the salary of a financial planner ($10,900). Variable costs include payments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Read the requirements. Requirement 2. Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $11,200. Begin by selecting the formula to compute the required sales in units to earn a target profit. = Target profit Rearrange the formula you determined above and compute the required number of trades to earn a monthly target profit of $11,200. Diversified must make trades to earn a monthly operating income…

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