Please show work and answer all questions or please do not answer. This is one question. Thank you!
1. The Millwaukee power plant that services all manufacturing departments of MidWest Engineering has a budget for the coming year. This budget has been expressed in the following monthly terms: (Click the icon to view the budgeted data.) The expected monthly costs for operating the power plant during the budget year are $10,400: $2,400 variable and $8,000 fixed. Read the requirements. Requirement 1. Assume that a single cost pool is used for the power plant costs. What budgeted amounts will be allocated to each manufacturing department if (a) the rate is calculated based on practical capacity and costs are allocated based on practical capacity and (b) the rate is calculated based on expected monthly usage and costs are allocated based on expected monthly usage? (Round the budgeted rate to the nearest cent.) (a) (b) Budgeted rate per hour: Livonia Warren Dearborn Westland Total Requirement 2. Assume the dual-rate method is used with separate cost pools for the variable and fixed costs. Variable costs are allocated on the basis of expected monthly usage. Fixed costs are allocated on the basis of practical capacity. What budgeted amounts will be allocated to each manufacturing department? Why might you prefer the dual-rate method? Begin by calculating the budgeted amounts that will be allocated to each manufacturing department. Variable Fixed Total Budgeted rate per hour: Livonia Warren Dearborn Westland Total Why might you prefer the dual-rate method? The dual rate allows (1) allocation of the power department costs. The dual rate permits the use of (2) Why might you prefer the dual-rate method? The dual rate allows (1) allocation of the power department costs. The dual rate permits the use of (2) 1: Data Table Manufacturing Department Livonia Needed at Practical Capacity Production Level (Kilowatt-Hours) 6,000 10,000 15,000 Warren 7,000 Dearborn 12,000 3,000 4,000 3,000 Westland 40,000 20,000 Total 2: Requirements 1. Assume that a single cost pool is used for the power plant costs. What budgeted amounts will be allocated to each manufacturing department if (a) the rate is calculated based on practical capacity and costs are allocated based on practical capacity and (b) the rate is calculated based on expected monthly usage and costs are allocated based on expected monthly usage? 2. Assume the dual-rate method is used with separate cost pools for the variable and fixed costs. Variable costs are allocated on the basis of expected monthly usage. Fixed costs are allocated on the basis of practical capacity. What budgeted amounts will be allocated to each manufacturing department? Why might you prefer the dual-rate method? (1) O a more general (2) O different allocation bases for different cost pools O the same allocation base for all cost pools O a more refined Average Expected Monthly Usage (Kilowatt-Hours)
