Chocolatine is a producer of premium chocolate based in Pale Ale Corento view lination For 2017, the moring fleet had a gractical capacity of 45 round-trips between the Palo Ato plant and the two suppliers recorded the following information then to view ten budget and charis) More Info Data Table The company has a separate dusion for each of its we products dark chocolate and nik decolul. Chocolat purchases hudents from Wisconsin n for its ar chodisko and from a fil chocolul din Buhlation are the same distance from Chocolat's Para Ako plurid. Crocolat Inc.presa Meet tucks as a cost center that charges the divisions for variatie ce drives and fuel and fixed costs like depreciation insurance and registration of aperuing the feet. Each division is evaluated on the base of its operating income Budged Ad $ 551200 5 78.000 Costs of truck Number of round-trip for dark chocolate division Pale Alto lant - Wisconsin Number of rounds for milk chocolate Himalar Pild Area plant - Laalai 30 30 15 10 Ich M 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 b. Calculate the budgeted rate per round-trip and allocate costs based on actual round-trips used by 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 C. Calculate the actual rate per round-trip and allocate costs based on actual round-trips used by each division. The actual rate per round-trip is This translates to indirect costs allocated to the dark chocolate division for and milk chocolate Requirement 2. Describe the advantages and disadvantages of using each of the three methods in requirement 1. When budgeted rates/budgeted quantities are used the dark chocolate and milk chocolate divisions know at the start of 2017 that they will be charged a total of for transportation of dark chocolate and for transportation of milk chocolate. In effect, the fleet resource becomes a cost for each division. This type of cost may motivate the trucking the managers to fleet. When budgeted rates/actual quantities are used, the dark chocolate and milk chocolate divisions know at the start of 2017 that they will be charged a V. This enables them to make operating decisions knowing the rate they will have to pay for transportation. Each division can still control its total transportation costs by Assuming that the budgeted rate was based on honest estimates of their annual usage, this method will also provide an estimate of the The use of actual costs/actual quantities makes the costs allocated to one division a function of the actual demand of other users. In 2017, the actual usage was the 45 trips budgeted. The dark chocolate division used it had budgeted. Because the milk chocolate division's actual trips were the budgeted trips, the dark chocolate division bears a proportionately share of the fixed costs. Would you encourage Chocolat Inc. to use one of these methods? Explain and indicate any assumptions you made. Of the three single-rate methods suggested in this problem, the may be the best one to use. (The management of Chocolat, Inc. would have to ensure that the managers of the dark chocolate and milk chocolate divisions do not systematically overestimate their use of the fleet division in an effort to drive down the rate). Chocolatine is a producer of premium chocolate based in Pale Ale Corento view lination For 2017, the moring fleet had a gractical capacity of 45 round-trips between the Palo Ato plant and the two suppliers recorded the following information then to view ten budget and charis) More Info Data Table The company has a separate dusion for each of its we products dark chocolate and nik decolul. Chocolat purchases hudents from Wisconsin n for its ar chodisko and from a fil chocolul din Buhlation are the same distance from Chocolat's Para Ako plurid. Crocolat Inc.presa Meet tucks as a cost center that charges the divisions for variatie ce drives and fuel and fixed costs like depreciation insurance and registration of aperuing the feet. Each division is evaluated on the base of its operating income Budged Ad $ 551200 5 78.000 Costs of truck Number of round-trip for dark chocolate division Pale Alto lant - Wisconsin Number of rounds for milk chocolate Himalar Pild Area plant - Laalai 30 30 15 10 Ich M 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 b. Calculate the budgeted rate per round-trip and allocate costs based on actual round-trips used by 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 C. Calculate the actual rate per round-trip and allocate costs based on actual round-trips used by each division. The actual rate per round-trip is This translates to indirect costs allocated to the dark chocolate division for and milk chocolate Requirement 2. Describe the advantages and disadvantages of using each of the three methods in requirement 1. When budgeted rates/budgeted quantities are used the dark chocolate and milk chocolate divisions know at the start of 2017 that they will be charged a total of for transportation of dark chocolate and for transportation of milk chocolate. In effect, the fleet resource becomes a cost for each division. This type of cost may motivate the trucking the managers to fleet. When budgeted rates/actual quantities are used, the dark chocolate and milk chocolate divisions know at the start of 2017 that they will be charged a V. This enables them to make operating decisions knowing the rate they will have to pay for transportation. Each division can still control its total transportation costs by Assuming that the budgeted rate was based on honest estimates of their annual usage, this method will also provide an estimate of the The use of actual costs/actual quantities makes the costs allocated to one division a function of the actual demand of other users. In 2017, the actual usage was the 45 trips budgeted. The dark chocolate division used it had budgeted. Because the milk chocolate division's actual trips were the budgeted trips, the dark chocolate division bears a proportionately share of the fixed costs. Would you encourage Chocolat Inc. to use one of these methods? Explain and indicate any assumptions you made. Of the three single-rate methods suggested in this problem, the may be the best one to use. (The management of Chocolat, Inc. would have to ensure that the managers of the dark chocolate and milk chocolate divisions do not systematically overestimate their use of the fleet division in an effort to drive down the rate)