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 $177,500 per year, consisting of $0.21 per ton variable cost and $127,500 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 59% of the Transport Services Department’s capacity and the Southern Plant requires 41%.
During the year, the Transport Services Department actually hauled the following amounts of ore for the two plants: Northern Plant, 125,000 tons; Southern Plant, 64,000 tons. The Transport Services Department incurred $371,000 in cost during the year, of which $53,700 was variable cost and $317,300 was fixed cost.
Required:
1. How much of the $53,700 in variable cost should be charged to each plant?
Variable cost charged to Northern Plant | |
Variable cost charged to Southern Plant |
2. How much of the $317,300 in fixed cost should be charged to each plant?
Fixed cost charged to Northern Plant | |
Fixed cost charged to Southern Plant |
3. How much of the $371,000 in the Transport Services Department cost should be treated as a spending variance and not charged to the plants?
Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the...
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 $298,500 per year, consisting of $0.16 per ton variable cost and $248,500 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 59% of the Transport Services Department’s capacity and the Southern Plant...
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 $219,400 per year, consisting of $0.18 per ton variable cost and $169,400 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 63% of the Transport Services Department's capacity and the Southern Plant...
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 $237,000 per
year, consisting of $0.24 per ton variable cost and $187,000 fixed
cost. The level of fixed cost is determined by peak-period
requirements. During the peak period, the Northern Plant requires
58% of the Transport Services Department’s capacity and the
Southern Plant...
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 $318,600 per year, consisting of $0.15 per ton variable cost and $268,600 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 65% of the Transport Services Department's capacity and the Southern Plant...
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 $204,700 per year, consisting of $0.19 per ton variable cost and $154,700 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...
Frame Corporation's Maintenance Department provides services to the company's two operating divisions--the Paints Division and the Stains Division. The variable costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments. The fixed costs of the Maintenance Department are determined by the number of cases produced by the operating departments during the peak-period. Data appear below: Maintenance Department: Budgeted variable cost $ 6 per case Budgeted total fixed cost $ 328,000 Actual total...
Tasman Products, Ltd., of Australla has a Maintenance Department that services the equipment in the company's Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments on the basis of machine-hours. Cost and other data relating to the Maintenance Department and to the other two departments for the most recent year are presented below. Data for the Maintenance Department follow Budget $325,500 $417,150 $210,000 Actual Variable costs for lubricants Fixed costs for salaries and...
Tasman Products, Ltd., of Australia has a Maintenance Department that services the equipment in the company’s Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments on the basis of machine-hours. Cost and other data relating to the Maintenance Department and to the other two departments for the most recent year are presented below. Data for the Maintenance Department follow: Budget Actual Variable costs for lubricants $ 325,600 * $ 417,280 Fixed costs for...
Tasman Products, Ltd., of Australia has a Maintenance Department that services the equipment in the company's Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments on the basis of machine-hours. Cost and other data relating to the Maintenance Department and to the other two departments for the most recent year are presented below. Data for the Maintenance Department follow: Variable costs for lubricants Fixed costs for salaries and other Budget $ 294,000* $210,000...
Tasman Products, Ltd., of Australia has a Maintenance Department
that services the equipment in the company’s Forming Department and
Assembly Department. The cost of this servicing is charged to the
operating departments on the basis of machine-hours. Cost and other
data relating to the Maintenance Department and to the other two
departments for the most recent year are presented below.
Data for the Maintenance Department follow:
1. How much Maintenance Department cost should be charged to the
Forming Department and...