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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 Northem Plant

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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 Northem Plant and the Southern Plant Budgeted costs for the Transport Services Department total $261,800 per year, consisting of $0.2 per ton variable cost and $211,800 fixed cost. The level of fixed cost is determined by peak perlod requirements. During the peak period, the Northern Plant requires 51% of the Transport Services Department's capacity and the Southern Plant requires 49% During the year, the Transport Services Department actually hauled 125,000 tons of ore to the Northern Plant and 53,700 tons to the Southern Plant. The Transport Services Department incurred $350,000 in cost during the year, of which $54,000 was variable cost and $296,000 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 $296,000 in fixed cost should be charged to each plant? 3. Should any of the Transport Services Department's actual total cost of $350,000 be treated as a spending varlance and not charged to the plants? Complete this question by entering your answers in the tabs below. Required t Required 2 Required 3 How much of the Transport Services Department's variable costs should be charged to each plant? Vanable cost changed to Northern Plant Variable cost charged to Southern Plant Required 2 >

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