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*Problem 6-6 Elkhardt Airlines has three service departments: (1) ticketing, (2) baggage handling, and (3) engine maintenance. Thee service department costs are estimated for separate
*Problem 6-6 Elkhardt Airlines has three service departments: (1) ticketing, (2) baggage handling, and (3) engine maintenance. Thee service department costs are estimated for separate cost pools formed by department and are allocated to two revenue- producing departments: (1) domestic flights and (2) international flights. Elkhardt does not differentiate between fixed and variable costs in making allocations. The following data relate to the allocations: Budgeted Data Air Miles Cost $4,000,000 $2,000,000 Ticketing Baggage handling Engine maintenance 7,600,000 Domestic flights International flights 7,755,000 23,265,000 Allocate the service department costs to the revenue-producing departments using air miles as the allocation base Allocated to Domestic International Ticketing Baggage handling Maintenance
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