- Exercise 11 4 Algo Service Department Charges Lo11 4 Hannibal Steel Company Has A Transport Services Department That 1 (35.61 KiB) Viewed 136 times
- Exercise 11 4 Algo Service Department Charges Lo11 4 Hannibal Steel Company Has A Transport Services Department That 2 (43.85 KiB) Viewed 136 times
- Exercise 11 4 Algo Service Department Charges Lo11 4 Hannibal Steel Company Has A Transport Services Department That 3 (42.85 KiB) Viewed 136 times
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 $209,700 per year, consisting of $0.16 per ton variable cost and $159,700 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 57% of the Transport Services Department's capacity and the Southern Plant requires 43% During the year, the Transport Services Department actually hauled 129,000 tons of ore to the Northern Plant and 66,300 tons to the Southern Plant. The Transport Services Department incurred $356,000 in cost during the year, of which $53,300 was variable cost and $302,700 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 $302,700 in fixed cost should be charged to each plant? 3. Should any of the Transport Services Department's actual total cost of $356,000 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 fixed cost should be charged to each plant? Fixed cost charged to Northern Plant Fixed 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 $209,700 per year, consisting of $0.16 per ton variable cost and $159,700 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 57% of the Transport Services Department's capacity and the Southern Plant requires 43% During the year, the Transport Services Department actually hauled 129,000 tons of ore to the Northern Plant and 66,300 tons to the Southern Plant. The Transport Services Department incurred $356,000 in cost during the year, of which $53,300 was variable cost and $302,700 was foed cost Required: 1. How much of the Transport Services Department's variable costs should be charged to each plant? 2. How much of the $302,700 in fixed cost should be charged to each plant? 3. Should any of the Transport Services Department's actual total cost of $356,000 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 Should any of the Transport Services Department's actual total cost of $356,000 be treated as a spending variance and not charged to the plants? Spending variance