1.
(a)
The cost allocated to the divisions when variable costs are allocated using the budgeted rate per round trips and actual round trips used by each division.
Given information:
2013,
The variable cost rate per round trip is $1,350.
The fixed cost rate per round trip is $47,000 per 50 round trips.
The fixed cost rate per round trip is $950.
(b).
The cost allocated to the division when fixed costs are allocated using the budgeted rate per round trips and actual round trips used by each division.
Given information:
The variable cost rate per round trip is $1,350.
The fixed cost rate per round trip is $47,000 per 50 round trips.
The fixed cost rate per round trip is $950.
2.
To explain: The effects of using the dual-rate method rather than the single-rate method from the viewpoint of the DC division.

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Chapter 15 Solutions
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