Dual-rate cost allocation method, budgeted versus actual costs and quantities (contin¬

uation of 14-19). FruitJuice, Inc., decides to examine the effect of using a dual-rate method for allocating indirect trucking costs to each truck trip. At the start of 2007, the budgeted indirect costs were Variable indirect costs per trip Fixed indirect costs The actual results for the 300 round trips made in 2007 were Variable indirect costs Fixed indirect costs Assume all other information to be the same as in Exercise 14-19.

Required 1. What is the indirect cost per truck trip with a dual-rate method when

(a) variable indirect costs are allocated using the budgeted variable indirect rate times actual trips made and

(b) fixed indirect costs are allocated using the budgeted fixed indirect cost rate timesbudgeted trips to be made? What dollar amount will be allocated to the Orange Juice Division and the GrapefruitJuice Division for

(a) and for (b)?

2. Compare the results for requirement 1 with that in requirements 1

(a) and

(b) for Exercise 14-19. From the viewpoint of the Orange Juice Division, what are the effects of using a dual-rate method rather than a single-rate method?