Correl Company's power plant provides electricity for its two operating departments, A and B. The ...

Correl Company's power plant provides electricity for its two operating departments, A and B. The year 2015 budget for the power plant shows:

   Budgeted fixed costs   $80,000
   Budgeted variable costs
   per kilowatt hour (kwh)   $0.15
   
   Additional data for 2015:

   Budget      Actual
   (kwh)      (kwh)
   Department A   240,000   215,000
   Department B   160,000   195,000

   Actual power plant costs: fixed $92,000, variable $88,000

   Budgeted rates are used in the allocation of electricity cost.

Required:
a.   Compute the power plant costs allocated to A and B using the single-rate method with    budgeted usage as the allocation base.
b.   Compute the power plant costs allocated to A and B using the dual-rate method with actual usage as the allocation base for variable costs and budgeted usage as the allocation base for fixed costs.
c.   From the standpoint of Departments A and B, what are the two main benefits of the dual-rate method?