The East Wind Company has a power plant designed and built to serve its three manufacturing plants. Data for 2010 are as follows:

	Usage in Kilowatt-Hours	Usage in kiowatt-Hours
Factory Location	Budget	Actual
Pictou	100,000	80,000
Amherst	60,000	120,000
Yarmouth	40,000	40,000

Budgeted fixed costs for the year were $1,000,000. Actual fixed costs for the year were $1,100,000.

Variable costs were budgeted as $10 per kilowatt-hour. The actual total variable costs were $2,200,000.

1. Calculate the amount of power costs that would be allocated to each of the three locations using a single rate based on budgeted costs.

2. Calculate the amount of power costs that would be allocated to each of the three locations using a dual rate method based on budgeted costs for fixed and actual costs for variable.

Answer rating: 100% (QA)

Answer 1 Budgeted cost pool Fixed cost 1000000 Variable cost Variable cost per kilowatthour 1000 Bud... View the full answer