Reference no: EM133680177

Question

Hannibal steel company transport service department provides trucks to haul ore from the company mine to its two steel mills the northern plant and the southern plant budgeted cost for the transport service department total 350000 per year considering of 0.25 per ton variable cost and 300000 fixed cost the level of fixed cost is determined by by peak period requirements during the peak period the northern plant requires 70% of the transport service department capacity and the southern plant requires 30% during the year the transport service department actually hauled 130000 tons of ore to the northern plant and 50000 tons to the southern plant the transport service department incurred 364000 in cost during the year of which 54000 was variable and 310000 was fixed Required : how much of the transport serviced departments variable cost should be charged to each plant? how much of the transport service department's fixed cost should be charged. to each plant? should any of the transport services departments actual total cost 364000 be traded as a spending variance and not charged to the plants?explain.