The Juab Company Has a Freight Department That Delivers Scrap

question 12

Multiple Choice

The Juab Company has a Freight Department that delivers scrap metal from salvage yards to its two fabricating facilities--the Emory Plant and the Salina Plant. Operating data for the two plants for last year follow: Budgeted costs consist of $150,000 fixed costs and $0.50 variable cost for each ton of scrap delivered to the plants. Actual costs incurred in the Freight Department were $52,800 variable, and $165,000 fixed. Juab allocates variable and fixed service department costs separately. The level of budgeted fixed costs is determined by peak-period needs. The Emory Plant requires 40% of the peak-period capacity and the Salina Plant requires 60%.
-How much variable Freight Department costs should be charged to the Salina Plant at the end of the year for performance evaluation purposes?

• A)$30,000
• B)$33,000
• C)$25,000
• D)$22,500

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Definitions:

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating the leverage level and financial health.

Mortgage-backed Securities

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Persistence

The tendency of a variable, phenomenon, or condition to continue its existing trend or state over a period.

Mutual Funds

Mutual Funds are investment vehicles that pool money from multiple investors to purchase diversified portfolios of stocks, bonds, or other securities.