A company has a Trucking Services Department that provides transportation to haul a rare mineral from the company's mine to its two mills-the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department consists of $0.32 per ton variable cost and $355,000 of fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 70% of the Trucking Services Department's capacity and the Southern Plant requires 30%. During the year, the Trucking Services Department actually hauled 120,000 tons of mineral to the Northern Plant and 60,000 tons to the Southern Plant. The Trucking Services Department incurred $384,000 in cost during the year, of which $54,000 was variable cost and $330,000 was fixed cost. How much of the Trucking Services Department's variable costs should be charged to the Northern plant? O $36,000 O $38,400 O $57,600 O None of the listed answers O $28,800 How much of the Trucking Services Department's fixed costs should be charged te the Southern plant? O $106,500 O $118,333 O $177,500 O None of the listed answers O $248,500
A company has a Trucking Services Department that provides transportation to haul a rare mineral from the company's mine to its two mills-the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department consists of $0.32 per ton variable cost and $355,000 of fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 70% of the Trucking Services Department's capacity and the Southern Plant requires 30%. During the year, the Trucking Services Department actually hauled 120,000 tons of mineral to the Northern Plant and 60,000 tons to the Southern Plant. The Trucking Services Department incurred $384,000 in cost during the year, of which $54,000 was variable cost and $330,000 was fixed cost. How much of the Trucking Services Department's variable costs should be charged to the Northern plant? O $36,000 O $38,400 O $57,600 O None of the listed answers O $28,800 How much of the Trucking Services Department's fixed costs should be charged te the Southern plant? O $106,500 O $118,333 O $177,500 O None of the listed answers O $248,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Expert Solution
Step 1
Variable costs charged to Northern plant = Tonnes of ore hauled to Northern department x $0.29
= 120000 tonnes x $0.32
= $38,400
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