Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices. To compute: The variable cost of Transport Service Department that is charged to each plant.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 11B, Problem 11B.1E

1.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The variable cost of Transport Service Department that is charged to each plant.

1.

Expert Solution

Answer to Problem 11B.1E

The variable cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $32,500.

Explanation of Solution

Variable costs charged to Northern plantVariable costs charged to northern plant= Northern plant tons× Varible cost per unitVariable costs charged to northern plant= 130,000× $0.25Variable costs charged to northern plant= $32,500

Variable costs charged to Southern plant

Variable costs charged to Southern plant= Southern plant tons× Varible cost per unitVariable costs charged to Southern plant= $50,000× $0.25Variable costs charged to Southern plant= $12,500

2.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The fixed cost of Transport Service Department that is charged to each plant.

2.

Expert Solution

Answer to Problem 11B.1E

The fixed cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $90,000.

Explanation of Solution

Fixed cost charged to Northern plant

Fixed cost charged to Northern plant= Fixed cost ×70%Fixed cost charged to Northern plant= $300,000× 70%Fixed cost charged to Northern plant=$210,000

Fixed cost charged to Southern plant

Fixed cost charged to Southern plant= Fixed cost ×30%Fixed cost charged to Southern plant= $300,000× 30%Fixed cost charged to Southern plant=$90,000

3.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The actual costs of $364,000 that can be treated as the Spending variances and are not charged to the plants.

3.

Expert Solution

Answer to Problem 11B.1E

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Explanation of Solution

Total variable costs charges by both the plants are $45,000 ($32,500 + $12,500) and fixed cost to both the plants are $300,000 ($210,000 + $90,000).

Total charges to both the plants are $345,000

($45,000 (Variable charge )+$300,000(fixed charge ))

The total actual cost incurred is $364,000

The remaining cost $19000 ( $64,000−$345,000 )

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

The actual cost of direct labor per hour is $38.75 and the standard cost of direct labor per hour is $35.40. The direct labor hours allowed per finished unit is 1.25 hours. During the current period, 5,200 units of finished goods were produced using 4,150 direct labor hours. How much is the direct labor rate variance?

Accounting solution please

I am searching for the correct answer to this general accounting problem with proper accounting rules.

Answer 2

Question

Chapter 11B, Problem 11B.1E

1.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The variable cost of Transport Service Department that is charged to each plant.

1.

Expert Solution

Answer to Problem 11B.1E

The variable cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $32,500.

Explanation of Solution

Variable costs charged to Northern plantVariable costs charged to northern plant= Northern plant tons× Varible cost per unitVariable costs charged to northern plant= 130,000× $0.25Variable costs charged to northern plant= $32,500

Variable costs charged to Southern plant

Variable costs charged to Southern plant= Southern plant tons× Varible cost per unitVariable costs charged to Southern plant= $50,000× $0.25Variable costs charged to Southern plant= $12,500

2.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The fixed cost of Transport Service Department that is charged to each plant.

2.

Expert Solution

Answer to Problem 11B.1E

The fixed cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $90,000.

Explanation of Solution

Fixed cost charged to Northern plant

Fixed cost charged to Northern plant= Fixed cost ×70%Fixed cost charged to Northern plant= $300,000× 70%Fixed cost charged to Northern plant=$210,000

Fixed cost charged to Southern plant

Fixed cost charged to Southern plant= Fixed cost ×30%Fixed cost charged to Southern plant= $300,000× 30%Fixed cost charged to Southern plant=$90,000

3.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The actual costs of $364,000 that can be treated as the Spending variances and are not charged to the plants.

3.

Expert Solution

Answer to Problem 11B.1E

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Explanation of Solution

Total variable costs charges by both the plants are $45,000 ($32,500 + $12,500) and fixed cost to both the plants are $300,000 ($210,000 + $90,000).

Total charges to both the plants are $345,000

($45,000 (Variable charge )+$300,000(fixed charge ))

The total actual cost incurred is $364,000

The remaining cost $19000 ( $64,000−$345,000 )

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 11B, Problem 11B.1E

1.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The variable cost of Transport Service Department that is charged to each plant.

1.

Expert Solution

Answer to Problem 11B.1E

The variable cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $32,500.

Explanation of Solution

Variable costs charged to Northern plantVariable costs charged to northern plant= Northern plant tons× Varible cost per unitVariable costs charged to northern plant= 130,000× $0.25Variable costs charged to northern plant= $32,500

Variable costs charged to Southern plant

Variable costs charged to Southern plant= Southern plant tons× Varible cost per unitVariable costs charged to Southern plant= $50,000× $0.25Variable costs charged to Southern plant= $12,500

2.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The fixed cost of Transport Service Department that is charged to each plant.

2.

Expert Solution

Answer to Problem 11B.1E

The fixed cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $90,000.

Explanation of Solution

Fixed cost charged to Northern plant

Fixed cost charged to Northern plant= Fixed cost ×70%Fixed cost charged to Northern plant= $300,000× 70%Fixed cost charged to Northern plant=$210,000

Fixed cost charged to Southern plant

Fixed cost charged to Southern plant= Fixed cost ×30%Fixed cost charged to Southern plant= $300,000× 30%Fixed cost charged to Southern plant=$90,000

3.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The actual costs of $364,000 that can be treated as the Spending variances and are not charged to the plants.

3.

Expert Solution

Answer to Problem 11B.1E

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Explanation of Solution

Total variable costs charges by both the plants are $45,000 ($32,500 + $12,500) and fixed cost to both the plants are $300,000 ($210,000 + $90,000).

Total charges to both the plants are $345,000

($45,000 (Variable charge )+$300,000(fixed charge ))

The total actual cost incurred is $364,000

The remaining cost $19000 ( $64,000−$345,000 )

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 11B, Problem 11B.1E

1.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The variable cost of Transport Service Department that is charged to each plant.

1.

Expert Solution

Answer to Problem 11B.1E

The variable cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $32,500.

Explanation of Solution

Variable costs charged to Northern plantVariable costs charged to northern plant= Northern plant tons× Varible cost per unitVariable costs charged to northern plant= 130,000× $0.25Variable costs charged to northern plant= $32,500

Variable costs charged to Southern plant

Variable costs charged to Southern plant= Southern plant tons× Varible cost per unitVariable costs charged to Southern plant= $50,000× $0.25Variable costs charged to Southern plant= $12,500

2.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The fixed cost of Transport Service Department that is charged to each plant.

2.

Expert Solution

Answer to Problem 11B.1E

The fixed cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $90,000.

Explanation of Solution

Fixed cost charged to Northern plant

Fixed cost charged to Northern plant= Fixed cost ×70%Fixed cost charged to Northern plant= $300,000× 70%Fixed cost charged to Northern plant=$210,000

Fixed cost charged to Southern plant

Fixed cost charged to Southern plant= Fixed cost ×30%Fixed cost charged to Southern plant= $300,000× 30%Fixed cost charged to Southern plant=$90,000

3.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The actual costs of $364,000 that can be treated as the Spending variances and are not charged to the plants.

3.

Expert Solution

Answer to Problem 11B.1E

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Explanation of Solution

Total variable costs charges by both the plants are $45,000 ($32,500 + $12,500) and fixed cost to both the plants are $300,000 ($210,000 + $90,000).

Total charges to both the plants are $345,000

($45,000 (Variable charge )+$300,000(fixed charge ))

The total actual cost incurred is $364,000

The remaining cost $19000 ( $64,000−$345,000 )

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11B, Problem 11B.1E

1.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The variable cost of Transport Service Department that is charged to each plant.

1.

Expert Solution

Answer to Problem 11B.1E

The variable cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $32,500.

Explanation of Solution

Variable costs charged to Northern plantVariable costs charged to northern plant= Northern plant tons× Varible cost per unitVariable costs charged to northern plant= 130,000× $0.25Variable costs charged to northern plant= $32,500

Variable costs charged to Southern plant

Variable costs charged to Southern plant= Southern plant tons× Varible cost per unitVariable costs charged to Southern plant= $50,000× $0.25Variable costs charged to Southern plant= $12,500

2.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The fixed cost of Transport Service Department that is charged to each plant.

2.

Expert Solution

Answer to Problem 11B.1E

The fixed cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $90,000.

Explanation of Solution

Fixed cost charged to Northern plant

Fixed cost charged to Northern plant= Fixed cost ×70%Fixed cost charged to Northern plant= $300,000× 70%Fixed cost charged to Northern plant=$210,000

Fixed cost charged to Southern plant

Fixed cost charged to Southern plant= Fixed cost ×30%Fixed cost charged to Southern plant= $300,000× 30%Fixed cost charged to Southern plant=$90,000

3.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The actual costs of $364,000 that can be treated as the Spending variances and are not charged to the plants.

3.

Expert Solution

Answer to Problem 11B.1E

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Explanation of Solution

Total variable costs charges by both the plants are $45,000 ($32,500 + $12,500) and fixed cost to both the plants are $300,000 ($210,000 + $90,000).

Total charges to both the plants are $345,000

($45,000 (Variable charge )+$300,000(fixed charge ))

The total actual cost incurred is $364,000

The remaining cost $19000 ( $64,000−$345,000 )

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Answer 6

Chapter 11B, Problem 11B.1E

1.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The variable cost of Transport Service Department that is charged to each plant.

1.

Expert Solution

Answer to Problem 11B.1E

The variable cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $32,500.

Explanation of Solution

Variable costs charged to Northern plantVariable costs charged to northern plant= Northern plant tons× Varible cost per unitVariable costs charged to northern plant= 130,000× $0.25Variable costs charged to northern plant= $32,500

Variable costs charged to Southern plant

Variable costs charged to Southern plant= Southern plant tons× Varible cost per unitVariable costs charged to Southern plant= $50,000× $0.25Variable costs charged to Southern plant= $12,500

Answer 7

Chapter 11B, Problem 11B.1E

1.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The variable cost of Transport Service Department that is charged to each plant.

Answer 8

1.

Expert Solution

Answer to Problem 11B.1E

The variable cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $32,500.

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Variable costs charged to Northern plantVariable costs charged to northern plant= Northern plant tons× Varible cost per unitVariable costs charged to northern plant= 130,000× $0.25Variable costs charged to northern plant= $32,500

Variable costs charged to Southern plant

Variable costs charged to Southern plant= Southern plant tons× Varible cost per unitVariable costs charged to Southern plant= $50,000× $0.25Variable costs charged to Southern plant= $12,500

Answer 13

2.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The fixed cost of Transport Service Department that is charged to each plant.

2.

Expert Solution

Answer to Problem 11B.1E

The fixed cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $90,000.

Explanation of Solution

Fixed cost charged to Northern plant

Fixed cost charged to Northern plant= Fixed cost ×70%Fixed cost charged to Northern plant= $300,000× 70%Fixed cost charged to Northern plant=$210,000

Fixed cost charged to Southern plant

Fixed cost charged to Southern plant= Fixed cost ×30%Fixed cost charged to Southern plant= $300,000× 30%Fixed cost charged to Southern plant=$90,000

Answer 14

2.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The fixed cost of Transport Service Department that is charged to each plant.

Answer 15

2.

Expert Solution

Answer to Problem 11B.1E

The fixed cost of Transport Service Department that is charged to northern plant $210,000 and southern plant is $90,000.

Answer 16

2.

Expert Solution

Answer 17

2.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Fixed cost charged to Northern plant

Fixed cost charged to Northern plant= Fixed cost ×70%Fixed cost charged to Northern plant= $300,000× 70%Fixed cost charged to Northern plant=$210,000

Fixed cost charged to Southern plant

Fixed cost charged to Southern plant= Fixed cost ×30%Fixed cost charged to Southern plant= $300,000× 30%Fixed cost charged to Southern plant=$90,000

Answer 20

3.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The actual costs of $364,000 that can be treated as the Spending variances and are not charged to the plants.

3.

Expert Solution

Answer to Problem 11B.1E

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Explanation of Solution

Total variable costs charges by both the plants are $45,000 ($32,500 + $12,500) and fixed cost to both the plants are $300,000 ($210,000 + $90,000).

Total charges to both the plants are $345,000

($45,000 (Variable charge )+$300,000(fixed charge ))

The total actual cost incurred is $364,000

The remaining cost $19000 ( $64,000−$345,000 )

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Answer 21

3.

To determine

Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.

To compute: The actual costs of $364,000 that can be treated as the Spending variances and are not charged to the plants.

Answer 22

3.

Expert Solution

Answer to Problem 11B.1E

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.

Answer 23

3.

Expert Solution

Answer 24

3.

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Total variable costs charges by both the plants are $45,000 ($32,500 + $12,500) and fixed cost to both the plants are $300,000 ($210,000 + $90,000).

Total charges to both the plants are $345,000

($45,000 (Variable charge )+$300,000(fixed charge ))

The total actual cost incurred is $364,000

The remaining cost $19000 ( $64,000−$345,000 )

The overall spending variance of $19000 shows that the costs incurred in excess of the budget $0.25 per ton variable cost and budget $300,000 in fixed cost $19000 uncharged cost is the responsibility of the transport service department.