Question
Tarjee Airlines has three service departments: (1) ticketing, (2) baggage handling, and (3) engine maintenance. The service department costs are estimated for separate cost pools
Tarjee 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. Tarjee does not differentiate between fixed and variable costs in making allocations. The following data relate to the allocations:
Budgeted DataCostsAir MilesTicketing$3,600,000Baggage handling$1,600,000Engine maintenance$10,400,000Domestic flights7,490,000International flights22,470,000
Allocate the service department costs to the revenue-producing departments using air miles as the allocation base.
Allocated to Domestic and International
Ticketing (Domestic ) ____________
Ticketing (International) ___________
Baggage handling (Domestic) ______________
Baggage handling (International) ____________
Maintenance (Domestic) ____________
Maintenance (International) _____________
Total (Domestic) _________ Total (International) _________
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