Indulgence Inc. decides to examine the effect of using the dual-rate method for allocating truck costs to each round-trip E: (Click the icon to view the cost information for 2017.) Indulgence Inc. is a producer of premium chocolate based in Palo Alto (Click the icon to view additional information.) For 2017, the trucking fleet had a practical capacity of 45 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.) Read the requirements. 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? Milk chocolate Dark chocolate Variable costs $ 49,500 Fixed costs Total costs chod dge pudge 0 More Info The company has a separate division for each of its two products: dark chocolate and milk chocolate. Indulgence purchases ingredients from Wisconsin for its dark chocolate division and from Louisiana for its milk chocolate division. Both locations are the same distance from Indulgence's Palo Alto plant. Indulgence 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. Print Done 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? 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? Single-rate method data: Total costs Rate per round-trip Costs allocated by Dark chocolate Milk chocolate Budgeted Budgeted round-trips $ 69,000 $ 34,500 Actual round-trips Budgeted used 69,000 23,000 Actual round-trips Actual used 57,000 19,000 The olar ed 0 - X Data Table Budgeted Actual $ 103,500 $ 76,000 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) 30 30 15 10 Print Done 1 Data Table At the start of 2017, the budgeted costs were: Variable cost per round-trip $ 1,650 Fixed costs $ 29,250 The actual results for the 40 round-trips made in 2017 were: Variable cost $ 58,000 Fixed costs 18,000 $ 76,000 Total Print Done Indulgence Inc. decides to examine the effect of using the dual-rate method for allocating truck costs to each round-trip E: (Click the icon to view the cost information for 2017.) Indulgence Inc. is a producer of premium chocolate based in Palo Alto (Click the icon to view additional information.) For 2017, the trucking fleet had a practical capacity of 45 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.) Read the requirements. 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? Milk chocolate Dark chocolate Variable costs $ 49,500 Fixed costs Total costs chod dge pudge 0 More Info The company has a separate division for each of its two products: dark chocolate and milk chocolate. Indulgence purchases ingredients from Wisconsin for its dark chocolate division and from Louisiana for its milk chocolate division. Both locations are the same distance from Indulgence's Palo Alto plant. Indulgence 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. Print Done 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? 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? Single-rate method data: Total costs Rate per round-trip Costs allocated by Dark chocolate Milk chocolate Budgeted Budgeted round-trips $ 69,000 $ 34,500 Actual round-trips Budgeted used 69,000 23,000 Actual round-trips Actual used 57,000 19,000 The olar ed 0 - X Data Table Budgeted Actual $ 103,500 $ 76,000 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) 30 30 15 10 Print Done 1 Data Table At the start of 2017, the budgeted costs were: Variable cost per round-trip $ 1,650 Fixed costs $ 29,250 The actual results for the 40 round-trips made in 2017 were: Variable cost $ 58,000 Fixed costs 18,000 $ 76,000 Total Print Done