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    Dual Rate Cost Allocation

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    A Company allocates telephone expenses based on a variable rate of $1 per phone call. It allocates the fixed monthly charge equally over its budgeted usage. B Division expected to make 300 telephone calls, but actually made 350. C Division expected to make 300 telephone calls, but actually made 250. Actual fixed costs for the month totaled $3,000. What are the amounts allocated to the two divisions using a dual rate of allocation?

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    Cost allocation using a dual rate of allocation:

    It is important to note that costs are allocated using budgeted rates that are applied to actual ...

    Solution Summary

    Allocation of Cost using both a variable and a fixed rate of allocation.

    $2.49

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