ezto
Subject:AccountingPrice:2.84 Bought3
ezto.me on.com/ext/map/indexhtml?con-conexternal browser=08daunchUrlhttps%253A 2F%252Fims.mheducatio apter 11 rebut Proberts 2 Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the company's mine to its two ste mills me Northern Plant and the Southern Plant Budgeted costs for the Transport Services Department total 5341 900 per year consisting of $023 per tony variable cost and $2.91.900 fixed cost The level of fixed cost is determined by peak period requirements During me 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 125.000 tons of ore to the Northern Plant and 53.400 tons to the Southern Plant The Transport Services Department incurred $362.000 in cost during the year of which $53.800 wes variable cost and $308,200 was fixed cost nak Required: How much of the Transport Services Department's variable costs should be charged to each plane 2 How much of the $308.200 in fixed cost should be charged to each plan? 3 Should any of the Transport Services Department's actual total cost of $362,000 be treated as a spending variance and not charged to the plants? encer Complete this question by entering your answers in the tabs below. Required Required 2 Required 3 How much of the fixed cost should be charged to each plant? Fored cost charged to Northern Plant Foed cost charged to Southern Plant
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
1) Calculate the amount of variable cost charged to each plant.
the variable cost charged to northern plant = Northern plant tons * Variable cost per unit
= 125,000 *0.23
= 28,750
Variable cost charged to southern plant = southern plant tons * variable cost per unit
= 63,400*0.23
= 14,582
2) Calculate the amount of fixed cost charged to each plant.
Fixed cost charged to Northern plant = Fixed cost *65%
= 291,900*52%
= 151,788
Fixed cost charged to southern plant = Fixed cost *35%
= 291,900*48%
=140,112
3) The $362,000 in total cost should not be charged to the plants. The total variable changes to both the plants are $43,332(28,750+14,582)
. And the total fixed charged to both the plants are $291,900 (151,788+140,112). So, the total charges to both the plants are 335,232($43,332(variable charges)+291,900(fixed charges))
. The total actual cost incurred is $362,000. Hence, the remaining cost of $26,768(362,000 -335,232) is considered as spending variance.
The overall spending variance of $26,768 shows that the costs incurred in excess of the budgeted $0.23 per ton variable cost and budgeted $291,900 in fixed costs.
The $26,768 uncharged cost is the responsibility of the "Transport Service Department" (maintenance department).
If you have any query or any Explanation please ask me in the comment box, i am here to help you.please give me positive rating.
