Chocolade Inc. is a producer of premium chocolate based in Palo Alto. (Click the icon to view additional information.) For2020,thetruckingfleethadapracticalcapacityof45round-tripsbetweenthePaloAltoplantandthetwosuppliers.Itrecordedthefollowinginformation:(Clicktheicontoviewthebudgetandactualdata.) Requirement 1. 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. The budgeted rate per round-trip is . This translates to indirect costs allocated to the dark chocolate division for and milk chocolate division for 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 Requirements 1. 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. Describe the advantages and disadvantages of using each of the three methods in requirement 1. Would you encourage Chocolade Inc. to use one of these methods? Explain and indicate any assumptions you made. Chocolade Inc. is a producer of premium chocolate based in Palo Alto. (Click the icon to view additional information.) For2020,thetruckingfleethadapracticalcapacityof45round-tripsbetweenthePaloAltoplantandthetwosuppliers.Itrecordedthefollowinginformation:(Clicktheicontoviewthebudgetandactualdata.) Requirement 1. 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. The budgeted rate per round-trip is . This translates to indirect costs allocated to the dark chocolate division for and milk chocolate division for 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 Requirements 1. 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. Describe the advantages and disadvantages of using each of the three methods in requirement 1. Would you encourage Chocolade Inc. to use one of these methods? Explain and indicate any assumptions you made
