Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Complete this question by entering your answers in the tabs below. How much of the Transport Services Department's variable costs should be charged to each
Complete this question by entering your answers in the tabs below. How much of the Transport Services Department's variable costs should be charged to each plant? 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 $233,800 per year, consisting of $0.21 per ton variable cost and $183,800 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 66% of the Transport Services Department's capacity and the Southern Plant requires 34%. During the year, the Transport Services Department actually hauled 111,000 tons of ore to the Northern Plant and 50,900 tons to the Southern Plant. The Transport Services Department incurred $360,000 in cost during the year, of which $53,700 was variable cost and $306,300 was fixed cost. Required: 1. How much of the Transport Services Department's variable costs should be charged to each plant? 2. How much of the $306,300 in fixed cost should be charged to each plant? 3. How much, if any, of the Transport Services Department's actual total cost of $360,000 should be treated as a spending variance and not charged to the plants? Complete this question by entering your answers in the tabs below. How much of the fixed cost should be charged to each plant? Complete this question by entering your answers in the tabs below. How much, if any, of the Transport Services Department's actual total cost of $360,000 should be treated as a spending variance and not charged to the plants
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To solve this problem well break it down by requirement Required 1 Variable Costs 1 Calcu...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started