15-18 Single-rate method, budgeted versus actual costs and quantities. Chocolat Inc. is a producer of premium chocolate based in Owen Sound. The company has a separate division for each of its twoproducts: dark chocolate and milk chocolate. Chocolat purchases ingredients from Toronto for its darkchocolate division and from Barrie for its milk chocolate division. Both locations are the same distance fromChocolats Owen Sound plant. Chocolat Inc. operates a fleet of trucks as a cost centre that charges the divisions for variable costs (driversand fuel) and fixed costs (vehicle amortization, insurance, and registration fees) of operating the fleet. Eachdivision is evaluated on the basis of its operating income. For the year, the trucking fleet had a practical capacityof 60 round trips between the Owen Sound plant and the two suppliers. It recorded the following information: BudgetedActual Costs of truck fleet 120,000112,750 Number of round trips for dark chocolate3530 division (Owen Sound plantToronto) Number of round trips for milk chocolate2525 division (Owen Sound plantBarrie) Required Using the single-rate method, allocate costs to the dark chocolate division and the milk chocolate division in these three ways: a) Calculate the budgeted rate per round trip and allocate costs based on round trips budgeted for each division. b) Calculate the budgeted rate per round trip and allocate costs based on actual round trips used by each division. c) Calculate the actual rate per round trip and allocate costs based on actual round trips used by each division. 2. In your words, describe the advantages and disadvantages of using each of the three methods in requirement 1. Would you encourage Chocolat Inc. to use one of these methods? Explain and indicate any assumptions you made