$410,000 of Indirect costs, The barkwide rate could be based on ether direct lab

Question

$410,000 of Indirect costs, The barkwide rate could be based on ether direct labor houts ol-h Banc Corp. Trust is considering either a bankwide overhead rate or department overhead rates to allocate Commercial Loans. The following information was gathered for the upcoming period Consumer Commercial Direct Costs $350.000 5250,000 16,000 650 400 Banc Corp. Trust estimetes that it costs $500 to analyze and close a commercial loan This amount has been included in the $410.000 of indirect costs, How much of the $410000 indirect costs should be O $210,000 O s60000 O $130,000. O $350,000

Explanation / Answer

Calculation of indirect cost allocated to consumer department:

Total indirect cost= $410000

Indirect cost allocated to commercial loan= 400*$500= $200000

Therefore indirect cost allocated to consumer department= 410000-200000= $210000

So correct answer is $210000

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