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The East Wind Company has a power plant designed and built toserve its three manufacturing plants. Data for 2010 are as follows:Usage in Kilowatt-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 fixedcosts for th year were $1,100,000.
Variable costs were budgeted as $10 per kilowatt-hour. Theactual total variable costs were
$2,200,000.
1. Calculate the amount of power costs that would be allocatedto each o the three locations using
a single rate based on budgeted costs.
2. Calculate the amount of power costs that would be allocated toeach o the three locations using
a dual rate method based on budgeted costs for fixed and actualcosts for variable.
