Use the following to answer questions:
The Dedham Cooperative Bank is considering either a bank wide overhead rate or departmental overhead rates to allocate $2,000,000 of indirect costs. The bank wide rate would be based on either direct labor hours or the number of loans processed. The departmental rates would be based on direct labor time for Consumer Loans and a dual rate based on direct labor time and the number of loans processed for
Commercial Loans. The following information was gathered for the upcoming period:

-If Dedham Cooperative uses a bank-wide rate based on direct labor time, what would be the indirect costs allocated to the Consumer Department?
A) $800,000
B) $1,200,000
C) $1,600,000
D) $400,000

Question

Use the following to answer questions:
The Dedham Cooperative Bank is considering either a bank wide overhead rate or departmental overhead rates to allocate $2,000,000 of indirect costs. The bank wide rate would be based on either direct labor hours or the number of loans processed. The departmental rates would be based on direct labor time for Consumer Loans and a dual rate based on direct labor time and the number of loans processed for
Commercial Loans. The following information was gathered for the upcoming period:
 
-If Dedham Cooperative uses a bank-wide rate based on direct labor time, what would be the indirect costs allocated to the Consumer Department?
A) $800,000 
B) $1,200,000 
C) $1,600,000 
D) $400,000

Quizplus · Accepted Answer

To allocate indirect costs using a bank-wide rate based on direct labor time, you would typically divide the total indirect costs by the total direct labor time to get a rate, then multiply that rate by the direct labor time of the specific department. Without specific numbers provided in the question, the correct answer cannot be determined through calculation. However, given that B) $1,200,000 is marked as the correct choice, it suggests that based on the information provided elsewhere (not in the question), this is the amount of indirect costs allocated to the Consumer Department using the bank-wide rate based on direct labor time.

Use the Following to Answer Questions