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Q – Distinguish between the single rate and the dual rate methods.A – The single rate method makes no distinction between fixed and variable costs. it allocates cost in each cost pool using the same rate per unit of a single allocation base. The dual rate method partitions the cost of each support department into two pools- a variable cost pool and a fixed cost pool and allocates each using a different cost allocation base. For a single method rate they use a combined rate for fixed and variable cost. The dual rate method allocation bases must be chosen for both the variable and fixed cost pools. Instructor’s Q – Excellent explanation; is one preferred over the other and why/why not?Criteria – If answer is outside of our textbook, please provide your source or reference, if within, provide the page or pages.Reference – Horngren, C. T., Datar, S.M., Foster, G., Rajan, M., & Ittner, C. (2009). Cost Accounting: A Managerial Emphasis (13th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Yes, the single rate method is preferred over the dual rate method mainly due to its simplicityand lack of complexity. I would use the fixed rate structure as the present market situationsare…
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