Answer the folloWing:

Question 5: (20 marks total) HIMYM Inc. is a large manufacturing company that runs its own electrical power plant from the excess steam produced in its manufacturing process. Power is provided to two production departments- Department A and Department B. The capacity of the power plant was originally determined by the expected peak demands of the two production departments. The expected average usage and peak demands are, respectively, 60 percent and 66,000,000 kWh (kilowatt-hours) for Department A and 40 percent and 44,000,000 kWh for Department B The budgeted monthly costs of producing power, based on normal usage of 100,000,000 kWh, are 30,500,000 in fixed costs and $8,000,000 in variable costs. For November, the actual kilowatt-hours used was 60,000,000 by Department A and 20,000,000 by Department B. Actual fixed costs were $30,500,000, and actual variable costs were $8,000,000 Ted Mosby, the controller, prepared the following monthly report: HIMYM Inc. Monthly Allocation Report November 2017 80,000,000kWh $30,500,000 $38,500,000 $0.48125 Power plant usage Actual costs: Fixed Variable Total ($38,500,000/80,000,000kWh Rate per kilowatt-hour Allocations Department A Department B 60,000,000kWh x $0.48125 (20,000,000kWh x $0.48125) $28,875,000 625,000 $38,500,000 Total allocated Ted fully allocated all power plant costs on the basis of actual kilowatt-hours used by each production department. This report will be submitted to the two production department operating managers. Required Discuss at least two problems with the monthly allocation report prepared by Ted for November 2017 at HIMYM Inc. (8 marks) Prepare a revised monthly allocation report for November 2017 using a flexible-budget approach. (12 marks) 1) 2)