AirBorne is a small airline operating out of Boise, Idaho. Its three flights travel to Salt Lake City, Reno, and Portland. The owner of the airline wants to assess the full cost of operating each flight. As part of this assessment, the costs of two support departments (maintenance and baggage) must be allocated to the three flights. The two support departments that support all three flights are located in Boise (any maintenance or baggage costs at the destination airports are directly traceable to the individual flights). Budgeted and actual data for the year are as follows for the support departments and the three flights:

Required:
1. Using the direct method, allocate the support service costs to each flight, assuming that the objective is to determine the cost of operating each flight.
2. Using the direct method, allocate the support service costs to each flight, assuming that the objective is to evaluate performance. Do any costs remain in the two support departments after the allocation? If so, how much? Explain.

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Budgeted data: Support Centers Maintenance Baggage Flights Salt Lake City Reno Portland $150,000 $20,000 $18,000 $30,000 $64,000 $5,000 $10,000 $6,000 2,000 4,000 2,000 10,000 15,000 5,000 $22,000 $17,000 $29,500 $6,200 $11,000 $5,800 - 1,800 4,200 2,500 - 8,000 16,000 6,000 Fixed overhead Variable overhead $240,000 $30,000 Hours of flight time* Number of passengers* Actual data: Fixed overhead $235,000 $156,000 Variable overhead $80,000 $33,000 Hours of flight time Number of passengers *Normal activity levels.