For 2017, the trucking fleet had a practical capacity of 50 roun Click the icon to view the budget and actual data) Read the requirements vision in these three ways to the dark chocolate division for i More Info The company has a separate division for each of its two products: dark chocolate and milk chocolate. Chocolat purchases ingredients from Wisconsin for its dark chocolate division and from Louisiana for its milk chocolate division. Both locations are the same distance from Chocolat's Palo Alto plant. Chocolat 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. he tart Done Print e of of 2017 that they will be charged a This enables them to make operating decisions kr ming that the budgeted rate was based on honest estimates of their annual usage, this method will also provide an e d of other users. In 2017, the actual usage was the 50 trips budgeted. The dark chocolate division used costs. For 2017, the trucking fleet had a practical capacity of 50 round-trips between th Palo Alto plant and the two suppliers. It recorded the following information: E (Click the icon to view the budget and actual data.) Chocolat Inc. is a producer of premium chocolate based in Palo Alto. (Click the icon to view additional information.) Read the requirements 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 S 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 division for S Requirement 2. Describe the advantages and disadvantages of using each of the three methods in requirement 1. When budgeted rates/budgeted quantties are used, the dark chocolate and milk chocolate divisions know at the start of er Choose from any list or enter any number in the input fields and then continue to the next question gri eting 15 D d Ma Types For 2017, the trucking fleet had a practical capacity of 50 round-trips between the Palo Alto plant and the two suppliers. It recorded the following information: (Click the icon to view the budget and actual data.) Chocolat Inc. is a producer of premium chocolate based in Palo Alto A (Click the icon to view additional information.) Read the requirements Requirement 2. Describe the advantages and disadvantages of using each of the three methods in requirement 1. npro When budgeted rates/budgeted quantities are used, the dark chocolate and mik chocolate divisions know at the start of for transportation 2017 that they will be charged a total of $ for transportation of dark chocolate and $ wtions how of milk chocolate. In effect, the fleet resource becomes a cost for each division. This type of cost may motivate ession the managers to the trucking fleet. Opport When budgeted rates/actual quantities are used, the dark chocolate and mik chocolate divisions know at the start of 2017 that they will be charged a . This enables them to make operating decisions knowing the rate they will have to pay for transportation. tellig Each division can still control its total transportation costs by V. Assuming that the budgeted rate was based on honest mics estimates of their annual usage, this method will also provide an estimate of the Vith A M wice. 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Ea tomat al Dy 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 em |5 division in an effort to drive down the rate) 05 t better s and gr sUpload Choose from any list or enter any number in the input fields and then continue to the next question. Save for Later For 2017, the trucking fleet had a practical capacity of 50 round-trips between the Palo Alto plant and the two suppliers. It recorded the following information: E(Click the icon to view the budget and actual dala.) Chocolat Inc is a producer of premium chocolate based in Palo Alto. nal (Click the icon to view additional information.) Read the reguirements puruunupurior'uue o unu zUruu oywr uryuu rur of milk chocolate In effect, the fleet resource becomes a ro cost for each division. This type of cost may motivate the trucking floet. the managers to ns 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. ow sion pport 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 eliig 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 ics hAM ce. Ea tomat al Dy Of the three single-rate methods suggested in this problem, the V the 50 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 V share of the fixed costs Would you encourage Chocolat lInc. to use one of these methods? Explain and indcate any assumptions you made. V 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 em 5 division in an effort to drive down the rate). 15 t better Choose from any list or enter any number in the input fields and then continue to the next question. s and gre Upload Save for Later E (Click the icon to view the budget and actual data Read the requirements in these three ways. dark chocolate division for i Data Table Actual Budgeted 96,750 $ 115,000 S Costs of truck fleet Number of round-trips for dark chocolate 30 30 division (Palo Alto plant - Wisconsin) Number of round-trips for milk chocolate 15 20 division (Palo Alto plant - Louisiana) Done Print This enables them to make operating dec 17 that they will be charged a that the budgeted rate was based on honest estimates of their annual usage, this method will also pro the 50 trips budgeted. The dark chocolate division ther users. In 2017, the actual usage was