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 $237,500 per year, consisting of $0.22 per ton variable cost and $187,500 fixed cost. The level of fixed cost is determined by peak-perlod requirements. During the peak period, the Northern Plant requires 64% of the Transport Services Department's capacity and the Southern Plant requires 36%. During the year, the Transport Services Department actually hauled 126,000 tons of ore to the Northern Plant and 67,900 tons to the Southern Plant. The Transport Services Department Incurred $363,000 in cost during the year, of which $54,000 was variable and $309,000 was fixed. 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 $363,000 should be treated as a spending varlance and not charged to the plants? Complete this question by entering your answers in

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 $237,500 per year, consisting of $0.22 per ton variable cost and $187,500 fixed cost. The level of fixed cost is determined by peak-perlod requirements. During the peak period, the Northern Plant requires 64% of the Transport Services Department's capacity and the Southern Plant requires 36%. During the year, the Transport Services Department actually hauled 126,000 tons of ore to the Northern Plant and 67,900 tons to the Southern Plant. The Transport Services Department Incurred $363,000 in cost during the year, of which $54,000 was variable and $309,000 was fixed. 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 $363,000 should be treated as a spending varlance and not charged to the plants? Complete this question by entering your answers in

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Subject : Accounting
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 $321,300 per year, consisting of $0.15 per ton variable cost and $271,300 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 69% of the Transport Services Department's capacity and the Southern Plant requires 31%. During the year, the Transport Services Department actually hauled 124,000 tons of ore to the Northern Plant and 58,600 tons to the Southern Plant. The Transport Services Department incurred $361,000 in cost during the year, of which $54,000 was variable cost and $307,000 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 Transport Services Department's fixed costs…
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