Chocolade Inc. is a producer of premium chocolate based in Palo Alto.

For 2017, the trucking fleet had a practical capacity of 70 round-trips between the Palo Alto plant and the two suppliers. It recorded the following information:

Chocolade Inc. decides to examine the effect of using the dual-rate method for allocating truck costs to each round-trip.

1 More Info The company has a separate division for each of its two products: dark chocolate and milk chocolate. Chocolade purchases ingredients from Wisconsin for its dark chocolate division and from Louisiana for its milk chocolate division. Both locations are the same distance from Chocolade's Palo Alto plant. Chocolade Inc. operates a fleet of trucks as a cost center that charges the divisions for variable costs (drivers and fuel) and fixed costs (vehicle depreciation, insurance, and registration fees) of operating the fleet. Each division is evaluated on the basis of its operating income. Data Table IL Budgeted Actual $ 168,000 $ 133,250 Costs of truck fleet Number of round-trips for dark chocolate division (Palo Alto plant - Wisconsin) Number of round-trips for milk chocolate division (Palo Alto plant - Louisiana) 40 40 30 25 - * x Data Table At the start of 2017, the budgeted costs were: Variable cost per round-trip $ 1,450 Fixed costs $ 66,500 The actual results for the 65 round-trips made in 2017 were: Variable cost $ 58,500 74,750 Fixed costs $ 133,250 Total Requirement 1. Using the dual-rate method, what are the costs allocated to the dark chocolate division and the milk chocolate division when (a) variable costs are allocated using the budgeted rate per round-trip and actual round-trips used by each division and when (b) fixed costs are allocated based on the budgeted rate per round-trip and round-trips budgeted for each division? Dark chocolate Milk chocolate Variable costs Fixed costs Total costs Requirement 2. From the viewpoint of the dark chocolate division, what are the effects of using the dual-rate method rather than the single-rate method? by changes from its own The dual rate how the fixed indirect cost component is treated. By using budgeted trips made, the dark chocolate division is budgeted usage or that of other divisions. When budgeted rates and actual trips are used for allocation, the dark chocolate division is assigned amount for fixed costs as under the dual-rate method because it made number of trips as budgeted