Question 5 : 120 mark's total ! HIMI'M INC. is a large manufacturing company that runs its own Electrical power plant from the EXCESS* steam produced in its manufacturing process . Power is provided to two production departments - Department A and Department E . The capacity of the power plant was originally determined by the Expected peak demands of the two production departments . The expected average usage and peak` demands are , respectively , 50 percent and GE , god, 000 KWh ( kilowatt- hours ) for Department A and 40 percent and 4 4 , 090 , 000 KWh for Department {` The budgetEd monthly costs of producing power , based on normal usage of 109, 000, 000 KWh , are* $30, 500,000 in fixed costs and $8 , 000 , 000 in variable costs . For November , the actual kilowatt- hours used was 60, 090, 000 by Department A and 20, 000 , 000 by Department E . Actual fixed costs were* $30, 500, 000 , and actual variable costs were $8 ,000 , 000 . Ted Mosby , the controller , prepared the following monthly report : HIMYMIND Monthly Allocation Report November 2017 Power plant usage 30, 000, cookwith Actual costs : Fixed $30, 500, 000 Variable 8,000, 000 Total $38, 500, 000 Rate per kilowatt - hour 15:38, 500, 000 / 80, 000, 00 0 k W/h ) $0. 48125 Allocations :" Department A 50 , 000 , 00 0 k Wh * $0. 48125 ) $28 , 875, 000 Department E (20, 000 , 00.0 KWh x 50. 48125 ) 9 . 625 , 000 Total allocated $38, 50.0, 000 Ted fully allocated all power plant costs on the basis of actual kilowatt- hours used by each production department . This report will be submitted to the two production department operating managers . Required Discuss at least two problems with the monthly allocation report prepared by Ted for November 2017 at HIMYM Inc . (8 marks ) 2 ) Prepare a revised monthly allocation report for November 2017 using a flexible -budget approach . ( 12 mark's )