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Hannibal Steel Company's Transport Services Department provides trucks to haul ore from the company's mine to its two steel mills - the Northern Plant and

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Hannibal Steel Company's Transport Services Department 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 $288,800 per year, consisting
of $0.25 per ton variable cost and $238,800 fixed cost. The level of fixed cost is determined by peak-period requirements. During the
peak period, the Northern Plant requires 68% of the Transport Services Department's capacity and the Southern Plant requires 32%.
During the year, the Transport Services Department actually hauled 123,000 tons of ore to the Northern Plant and 67,500 tons to the
Southern Plant. The Transport Services Department incurred $368,000 in cost during the year, of which $53,600 was variable and
$314,400 was fixed.
Required:
How much of the Transport Services Department's variable costs should be charged to each plant?
How much of the Transport Services Department's fixed costs should be charged to each plant?
How much, if any, of the Transport Services Department's actual total cost of $368,000 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 2
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
How much of the Transport Services Departments fixed costs should be charged to each plant?
Fixed cost charged to Northern Plant
Fixed cost charged to Southern Plant
How much, if any, of the Transport Services Departments actual total cost of $368,000 should be treated as a spending variance and not charged to the plants?
Spending variance
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