Answered step by step
Verified Expert Solution
Link Copied!

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 mills--the Northern Plant

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
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 $332,900 per year, consisting of $0.15 per ton variable cost and $282,900 fixed cost. The level of fixed cost is determined by peak-period requirements During the peak perlod, the Northern Plant requires 52% of the Transport Services Department's capacity and the Southern Plant requires 48% During the year, the Transport Services Department actually hauled 124,000 tons of ore to the Northern Plant and 65,600 tons to the Southern Plant. The Transport Services Department incurred $352,000 in cost during the year, of which $53,400 was variable cost and $298,600 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 $298,600 in fixed cost should be charged to each plant? 3. How much, if any, of the Transport Services Department's actual total cost of $352,000 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 Plant Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much of the 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, if any, of the Transport Services Department's actual total cost of $352,000 should be treated as a spending variance and not charged to the plants? Spending variance

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Exploring Strategic Change

Authors: Julia Balogun, Veronica Hope Hailey, Stafanie Gustafsson

4th Edition

0273778919, 9780273778912

More Books

Students also viewed these Accounting questions

Question

understand the diversity and complexity of ageing in the workplace;

Answered: 1 week ago