(Solution) - Dual rate method budgeted versus actual costs and practical -(2025 Original AI-Free Solution)

Paper Details

Dual-rate method, budgeted versus actual costs, and practical capacity versus actual quantities (continuation of 15-17). Chocolat, Inc. decides to examine the effect of using the dual-rate method for allocating truck costs to each round-trip. At the start of 2009, the budgeted costs were:

The actual results for the 45 round-trips made in 2009 were:

Assume all other information to be the same as in Exercise 15-17.
1. Using the dual-rate method, what are the costs allocated to the Dark Chocolate Division and the Milk Chocolate Division when (a) variable costs are allocated using the budgeted rate per round-trip and actual round-trips used by each division and when (b) fixed costs are allocated based on the budgeted rate per round-trip and round-trips budgeted for each division?
2. From the viewpoint of the Dark Chocolate Division, what are the effects of using the dual-rate method rather than the single-ratemethods?