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Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from...

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Accounting

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Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the company's mire to its two steel milis - the Northern Plant and the Southern Plant: Budgeted costs for the Tronsport Services Department total $257900 per year, consisting of $0,2 per ton variable cost and $207,900 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant recuires 62% of the Transport Services Department's capacity and the Southern Plant requires 38% During the year, the Transport Services Department actually hauled 125,000 tons of ore to the Northern Plant and 54,300 tons to the Southern Plant. The Transport Services Department incurred $366.000 in cost during the yeat, of which $53,800 was variable cost and $312,200 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 Transport Services Department's foxed costs should be charged to each plant? 3. How much, if ony, of the Transport Services Department's actual total cost of 3366,000 should be treated as a spending variance ond not charged to the plants

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