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help solve 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
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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 Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $227,400 per year, consisting of $0.15 per ton variable cost and $177,400 fixed cost. The level of fixed cost is determined by peak-perlod requirements. During the peak period, the Northem Plant requires 59% of the Transport Senices Department's capacity and the Southern Plant requires 41 thin During the year, the Transport Services Department actually heuled 118,000 tons of ore to the Northern Plant and 65,200 tons to the Southern Plant. The Transport Services Department incurred $372,000 in cost during the year, of which $52,600 was variable cost and $319,400 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 $319,400 in foxed cost should be charged to each plant? 3. How much, if any, of the Transport Services Department's actual total cost of 5372,000 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 Transport Services Department's variable costs should be charged to each plant Step by Step Solution
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