Your company has a travel policy that reimburses employees for the “ordinary and necessary” costs of business travel. Employees often mix a business trip with pleasure either by extending the time at the destination or traveling from the business destination to a nearby resort or other personal destination.

When this happens, an allocation must be made between the business and personal portions of the trip.

However, the travel policy is unclear on the allocation method to use.

Consider this example. An employee obtained a first-class ticket for $2,640 and traveled the following itinerary:

From To Mileage One-Way Regular Fare Purpose Washington, D.C. Salt Lake City 1,839 $1,400 Business Salt Lake City Los Angeles 590 600 Personal Los Angeles Washington, D.C. 2,288 1,600 Return Required

a. Form small groups to compute the business portion of the airfare and state the basis for the indicated allocation that is appropriate according to each of the following independent scenarios:

(1) Based on the maximum reimbursement for the employee.

(2) Based on the minimum cost to the company.

b. Prepare a short presentation to management explaining the method that you think should be used and why. What ethical issues do you perceive and how should they be resolved? You do not have to restrict your recommendation to either of the methods in requirement (