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. Clients Revenues Eastside 25,000 $ 870,000 8,100 $ 99,000 $ 261,000 Westside 6,250 $ 500,000 2,700 Total 31,250 $1,450,000 10,800 $360,000 $ 870,000 Staff hours Staff costs General operating costs Required: a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the number of clients to allocate general operating costs. b. Based on the rates computed in requirement (al, what is the expected surplus (revenues less costs) for each center?
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. Clients Revenues Eastside 25,000 $ 870,000 8,100 $ 99,000 $ 261,000 Westside 6,250 $ 500,000 2,700 Total 31,250 $1,450,000 10,800 $360,000 $ 870,000 Staff hours Staff costs General operating costs Required: a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the number of clients to allocate general operating costs. b. Based on the rates computed in requirement (al, what is the expected surplus (revenues less costs) for each center?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text: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.
Clients
Revenues
Eastside
25,000
$ 870,000
8,100
$ 99,000
Westside
6,250
$ 580,000
2,700
$ 261,000
Total
31,250
$ 1,450,000
10,800
$360,000
$ 870,000
Staff hours
Staff costs
General operating costs
Required:
a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the
number of clients to allocate general operating costs.
b. Based on the rates computed in requirement (a), what is the expected surplus (revenues less costs) for each center?
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