Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 $268,000 per year, consisting of $0.22 per ton variable cost and $218,000 fixed cost. The level afxed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 59% of the Transport Services Department's capacity and the Southern Plant requires 41%. During the year, the Transport Services Department actually hauled 119.000 tons of ore to the Northern Plant and 57,300 tons to the Southern Plant. The Transport Services Department incurred $371,000 in cost during the year, of which $53,100 was variable cost and $317300 was fixed cost. Required: 1. How much ofthe Transport Services Department's variable costs should be charged to each plant? 2. How much of the Transport Services Department's fixed costs should be charged to each plant? 3. How much. if any, ofthe Transport Services Departments actual total cost of $371,000 should be treated as a spending variance and not charged to the plants? Complete this question by entering your answers in the tabs below. Required 1. Required 2 Required 3 How much of the Transport Services Department's variable costs should be charged to each plant? Variable cost charged to Northern Plant Variable cost charged to Southern F'lanl Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much of the Transport Services Department's xed costs should be charged to each plant? Fixed cost charged to Northern Plant _ Fixed cost charged to Sduthem Plant _ Complete this question by entering 1\"Four answers in the tabs below. Required 1 Required 2 Required 3 How much, if any, of the Transport Services Department's actual total cost of $3?1,000 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
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