Exercise 11-4 (Algo) Service Department Charges [LO11-4] 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 $315,500 per year, consisting of $0.15 per ton variable cost and $265,500 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, 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 129,000 tons of ore to the Northern Plant and 54,800 tons to the Southern Plant. The Transport Services Department incurred $358,000 in cost during the year, of which $52,900 was variable cost and $305,100 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 Transport Services Department's fixed costs should be charged to each plant? 3. How much, if any, of the Transport Services Department's actual total cost of $358,000 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
Exercise 11-4 (Algo) Service Department Charges [LO11-4] 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 $315,500 per year, consisting of $0.15 per ton variable cost and $265,500 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, 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 129,000 tons of ore to the Northern Plant and 54,800 tons to the Southern Plant. The Transport Services Department incurred $358,000 in cost during the year, of which $52,900 was variable cost and $305,100 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 Transport Services Department's fixed costs should be charged to each plant? 3. How much, if any, of the Transport Services Department's actual total cost of $358,000 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Exercise 11-4 (Algo) Service Department Charges [LO11-4]
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 $315,500 per year,
consisting of $0.15 per ton variable cost and $265,500 fixed cost. The level of fixed cost is determined by peak-period requirements.
During the peak period, 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 129,000 tons of ore to the Northern Plant and 54,800 tons to the
Southern Plant. The Transport Services Department incurred $358,000 in cost during the year, of which $52,900 was variable cost
and $305,100 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 Transport Services Department's fixed costs should be charged to each plant?
3. How much, if any, of the Transport Services Department's actual total cost of $358,000 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 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0ec21663-2da8-459b-b3de-ac10edd5e89c%2F4684b8f0-c89d-46ac-9917-4540f844dd7d%2Fik9boac_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 11-4 (Algo) Service Department Charges [LO11-4]
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 $315,500 per year,
consisting of $0.15 per ton variable cost and $265,500 fixed cost. The level of fixed cost is determined by peak-period requirements.
During the peak period, 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 129,000 tons of ore to the Northern Plant and 54,800 tons to the
Southern Plant. The Transport Services Department incurred $358,000 in cost during the year, of which $52,900 was variable cost
and $305,100 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 Transport Services Department's fixed costs should be charged to each plant?
3. How much, if any, of the Transport Services Department's actual total cost of $358,000 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 >
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