Chapter 11 Appendix

I needed help with both Requirement 2 & 3

Question & Requirement 2

Requirement 3

Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the company's mine to its two steel millsthe Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $286,100 per year, consisting of $0.19 per ton variable cost and $236,100 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 70% of the Transport Services Department's capacity and the Southern Plant requires 30%. During the year, the Transport Services Department actually hauled the following amounts of ore for the two plants: Northern Plant, 113,000 tons; Southern Plant, 64,900 tons. The Transport Services Department incurred $365,000 in cost during the year, of which $53,700 was variable cost and $311,300 was fixed cost. Required: 1. How much of the $53,700 in variable cost should be charged to each plant? 2. How much of the $311,300 in fixed cost should be charged to each plant? 3. How much of the $365,000 in the Transport Services Department cost should be treated as a spending variance 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 $311,300 in fixed cost should be charged to each plant? Fixed cost charged to Northern Plant Fixed cost charged to Southern Plant Required 1 Required 2 Required 3 How much of the $365,000 in the Transport Services Department cost should be treated as a spending variance and not charged to the plants? Spending variance