Grace Body Inc. has a new promotional program that offers a free gift-wrapping service for its customers. Grace's customer-service division has practical capacity to wrap 8,125 gifts at a budgeted fixed cost of $6,825 each month. The budgeted variable cost to gift wrap an item is $0.70. Although the service is free to customers, a gift-wrapping service cost allocation is made to the division where the item was purchased. The customer-service division reported the following for the most recent month: 5 Click the icon to view the actual, budgeted, and practical capacity units.) Required 1. Using the single-rate method, allocate gift-wrapping costs to different divisions in these three ways. 2. Using the dual-rate method, compute the amount allocated to each department when (a) the fixed-cost rate is calculated using budgeted costs and the practical gift-wrapping capacity, (b) fixed costs are allocated based on budgeted usage of gift-wrapping services, and (c) variable costs are allocated using the budgeted variable-cost rate and actual usage. 3. Comment on your results in requirements 1 and 2. Discuss the advantages of the dual-rate method. Rr. Requirement 1. Using the single-rate method, allocate gift-wrapping costs to different divisions in these three ways. Start with allocating (a), then (b), and finally (c). (Round all of your answers to the nearest cent.) (a) (b) (c) Budgeted rate per item: Data Table Women's face wash Men's face wash Division Fragrances Body wash Hair products Practical Capacity Actual Number Budgeted Number of Available for Gift- of Gifts Wrapped Gifts to Be Wrapped Wrapping 2,160 2,450 2,645 Women's face wash Men's face wash 770 820 915 Total Fragrances 1,590 1,780 1,955 ash 500 - X 420 1.355 655 1.955 980 Allocate costs in three ways ducts 6,000 6,825 8.125 a. Calculate the budgeted rate based on the budgeted number of gifts to be wrapped and allocate costs based on the budgeted use of gift-wrapping services). b. Calculate the budgeted rate based on the budgeted number of gifts to be wrapped and allocate costs based on actual usage. C. Calculate the budgeted rate based on the practical gift-wrapping capacity available and allocate costs based on actual usage. Print Done Clear All Check