Hannibal Steel Company's Transport Services Department 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 $154,500 per year, consistin of $0.2 per ton variable cost and $104,500 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 129,000 tons of ore to the Northern Plant and 64,500 tons to th Southern Plant. The Transport Services Department incurred $364,000 in cost during the year, of which $53,300 was variable and $310,700 was fixed.
Hannibal Steel Company's Transport Services Department 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 $154,500 per year, consistin of $0.2 per ton variable cost and $104,500 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 129,000 tons of ore to the Northern Plant and 64,500 tons to th Southern Plant. The Transport Services Department incurred $364,000 in cost during the year, of which $53,300 was variable and $310,700 was fixed.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 14E: Accepting business at a special price Box Elder Power Company expects to operate at 85% of...
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