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A company has a Trucking Services Department that provides transportation to haul a rare mineral from the company's mine to its two mills--the Northern Plant
A company has a Trucking Services Department that provides transportation to haul a rare mineral from the company's mine to its two mills--the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total cost consists of $0.29 per ton variable cost and $352,000 of fixed cost. The level of fixed cost is determined by peak-period requirement During the peak period, the Northern Plant requires 70% of the Trucking Services Department's capacity and the Southern Plant requires 30%. During the year, the Trucking Services Department actually hauled 120,000 tons of minera to the Northern Plant and 60,000 tons to the Southern Plant. The Trucking Services Department incurred $384,000 in cost during the year, of which $54,000 was variable cost and $330,000 was fixed cost 4 How much of the Trucking Services Department's operating costs (both fixed and variable) should be charged to the Northern plant? A. $ 123,000 B. $ 282,400 C. $ 268,800 D. $ 281,200 E None of the above
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