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Problem 4-19A (Algo) Cost allocation in a service industry LO 4-1, 4-2, 4-3 Walton Airlines is a small airline that occasionally carries overload shipments for
Problem 4-19A (Algo) Cost allocation in a service industry LO 4-1, 4-2, 4-3 Walton Airlines is a small airline that occasionally carries overload shipments for the overnight delivery company Never-Fail, Inc. Never- Fail is a multimillion-dollar company started by Wes Never immediately after he failed to finish his first accounting course. The company's motto is We Never-Fail to Deliver Your Package on Time. When Never-Fail has more freight than it can deliver, it pays Walton to carry the excess. Walton contracts with independent pilots to fly its planes on a per-trip basis. Walton recently purchased an airplane that cost the company $6,604,000. The plane has an estimated useful life of 25,400,000 miles and a zero salvage value. During the first week in January, Walton flew two trips. The first trip was a round trip flight from Chicago to San Francisco, for which Walton paid $290 for the pilot and $240 for fuel. The second flight was a round trip from Chicago to New York. For this trip, it paid $240 for the pilot and $120 for fuel. The round trip between Chicago and San Francisco is approximately 4,400 miles and the round trip between Chicago and New York is 1,100 miles. Required a. Select if the costs mentioned below are direct or indirect. b. Determine the total cost of each trip. Complete this question by entering your answers in the tabs below. Required A Required B Select if the costs mentioned below are direct or indirect. Pilot Fuel Depreciation Required A Required B Determine the total cost of each trip. (Do not round intermediate calculations.) Chicago to San Francisco Chicago to New York Total cost
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