ch.11 q.9

Exercise 11B-1 Service Department Charges (LO11-6) Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the company's mine to its two steel mills--the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $161.600 per year. consisting of $0.22 per ton variable cost and $111,600 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak perlod, the Northern Plant requires 65% of the Transport Services Department's capacity and the Southern Plant requires 35% During the year, the Transport Services Department actually hauled the following amounts of ore for the two plants: Northern Plant. 117.000 tons, Southern Plant, 52,200 tons. The Transport Services Department incurred $366.000 in cost during the year, of which $53,600 was variable cost and $312.400 was fixed cost. Required: 1. How much of the $53,600 in variable cost should be charged to each plant? 2. How much of the $312,400 in fixed cost should be charged to each plant? 3. How much of the $366,000 in the Transport Services Department cost should be treated as a spending varlance and not charged to the plants? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much of the $53,600 in variable cost should be charged to each plant? Variable cost charged to Northern Plant Variable cost charged to Southern Plant Required 2 > Exercise 11B-1 Service Department Charges (LO11-6) Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the company's mine to its two steel mills-the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $161,600 per year. consisting of $0.22 per ton variable cost and $111.600 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 65% of the Transport Services Department's capacity and the Southern Plant requires 35%. During the year, the Transport Services Department actually hauled the following amounts of ore for the two plants: Northern Plant, 117,000 tons: Southern Plant, 52,200 tons. The Transport Services Department incurred $366,000 in cost during the year, of which $53,600 was variable cost and $312.400 was fixed cost. Required: 1. How much of the $53.600 in variable cost should be charged to each plant? 2. How much of the $312,400 in fixed cost should be charged to each plant? 3. How much of the $366,000 in the Transport Services Department cost should be treated as a spending varlance and not charged to the plants? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much of the $312,400 in fixed cost should be charged to each plant? Fored cost charged to Northern Plant Fixed cost charged to Southern Plant