Bees Knees Honey (BKN) is a producer of premium honey and has two operating divisions - Clover Honey and Apple Blossom Honey. BKN uses its own fleet of trucks to deliver their finished products to stores.

BKN operates the fleet of trucks as a cost centre and charges each operating division for the costs associated to the fleet.

For 2020, the trucking fleet had a practical capacity of 1,000 round trips. Below are the budgeted and actual costs for 2020:

	Budgeted	Actual
Number of round trips for Clover Honey Division	600	640
Number of round trips for Apple Blossom Honey Division	400	300
Total Variable costs	$150,000	$121,500
Total Fixed costs	$80,000	$72,000

Required: (show all calculations)

Using the dual rate method, allocate the trucking fleet costs to the two operating divisions as follows:

a) Total variable costs are allocated on the basis of the budgeted rate and allocated to each department using actual round trips.

b) Total fixed costs are allocated on the basis of the budgeted rate and allocated to each department using budgeted round trips.

c) Describe the single rate method and when it should be used.