The Downstate Block Company Has a Trucking Department That Delivers

question 231

Multiple Choice

The Downstate Block Company has a trucking department that delivers crushed stone from the company's quarry to its two cement block production facilities-the West Plant and the East Plant. Budgeted costs for the trucking department are $740,000 per year in fixed costs and $0.90 per ton variable cost. Last year, 79,000 tons of crushed stone were budgeted to be delivered to the West Plant and 94,000 tons of crushed stone to the East Plant. During the year, the trucking department actually delivered 78,000 tons of crushed stone to the West Plant and 96,000 tons to the East Plant. Its actual costs for the year were $85,000 variable and $748,000 fixed. The level of budgeted fixed costs is determined by peak-period requirements. The West Plant requires 40% of the peak-period capacity and the East Plant requires 60%. The company allocates fixed and variable costs separately.How much fixed trucking department cost should be charged to the West Plant at the end of the year?

• A) $293,048
• B) $296,614
• C) $420,600
• D) $296,000

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Definitions:

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