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Southwest Airlines Co. uses operating costing for its flight operations. In June 2038, the company incurs $50,000,000 in costs allocated as follows: Fuel Costs: $20,000,000
Southwest Airlines Co. uses operating costing for its flight operations. In June 2038, the company incurs $50,000,000 in costs allocated as follows:
- Fuel Costs: $20,000,000
- Crew Salaries: $15,000,000
- Maintenance: $10,000,000
- Overhead: $5,000,000
Requirements:
- Classify each cost as direct or indirect.
- Perform an efficiency analysis for fuel consumption and maintenance.
- Prepare a cost allocation schedule using activity-based costing.
- Analyze the impact of cost control measures on profitability.
- Recommend ways to improve operational efficiency and reduce costs.
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