Morsley Company operates three vehicle rental divisions: Budget, Luxury, and Trucks. The Budget Division specializes in renting compact and subcompact cars; the Luxury Division specializes in renting large, luxury cars and vans; and the Truck Division rents pickups and small enclosed trucks for local moving.

Morsley has one support center, which is responsible for the service, maintenance, and cleanup of its fleet of vehicles. The costs of this support center are allocated to each operat¬

ing unit on the basis of total miles driven. During the first quarter, the support center was expected to spend a total of $40,000. Of this total, $16,000 was viewed as being fixed. Dur¬

ing the quarter, the support center incurred actual variable costs of $30,000 and actual fixed costs of $17,100.

The normal and actual miles logged for each rental unit during the first quarter are as follows:

Required:
1. Compute the predetermined support service cost per mile driven.
2. Compute the costs that would be allocated at the end of the quarter for purposes of performance evaluation.
3. Identify the costs of the support center that were not allocated to the three rental divi¬
sions. Why were these costs not allocated to the operating units?

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Budget Luxury Truck Normal activity Actual activity 120,000 100,000 80,000 150,000 110,000 100,000