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Problem 7-29 Direct Method, Variable versus Fixed Costing and Performance Evaluation AirBorne is a small airline operating out of Boise, Idaho. Its three flights travel
Problem 7-29 Direct Method, Variable versus Fixed Costing and Performance Evaluation AirBorne is a small airline operating out of Boise, Idaho. Its three flights travel to Salt Lake City, Reno, and Portland. The owner of the airline wants to assess the full cost of operating each flight. As part of this assessment, the costs of two support departments (maintenance and baggage) must be allocated to the three flights. The two support departments that support all three flights are located in Boise (any maintenance or baggage costs at the destination airports are directly traceable to the individual flights). Budgeted and actual data for the year are as follows for the support departments and the three flights: "Trumair acurity arris. Round all allocation ratios and variable rates to four significant digits. Round all allocated Required: 1. Allocate the support service costs using the direct method. 2. Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest cost. 3. Allocate the support service costs using the reciprocal method
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