Answer the following questions:

1. For each of the expenses listed in the income statement, select a cost driver from the drivers listed under Selected data. Provide rationale for your choice of each of the drivers.
2. Are there any expenses you would group together into a single pool? Why or why not?
3. How could Virgin America use these cost pools and activity-based costing information internally?

Pane > of 3 - 200M + ACCOUNTAN Headlines What are potential cost drivers for an ABC system at Virgin America? After several years of losses, Virgin America recently announced that it anticipates a profit for 2013. Although the company is expecting a profit for 2013, it still is not out of the woods. Critics have called for greater cost control at Virgin America. The following table contains selected financial and other data for Virgin America for 2012, Virgin America Selected francial data For Twelve Months Ended December 31, 2012 1000s omitted) $ 1,332,837 537,501 221,275 176,216 Partial income statement: Operating revenues Other expenses Aircraft fuel Aircraft rent Wages and salaris Aircraft maintenance Landing fees Sales and marketing Guest services Depreciation Other Total Operating expenses Operating income loss 74,456 110,165 107,136 50,440 11,250 $ 5 76,110 1,364,570 (31,733) ( Page 1 of 2 Page