Problem 6-6

World Airlines has three service departments: (1) ticketing, (2) baggage handling, and (3) engine maintenance. The 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. World does not differentiate between fixed and variable costs in making allocations. The following data relate to the allocations:

		Budgeted Data
		Costs		Air Miles
Ticketing		$5,248,000
Baggage handling		$2,124,000
Engine maintenance		$5,700,000
Domestic flights				7,852,500
International flights				23,557,500

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
	Total		$		$