Question
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
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 $4,368,000 Baggage handling $2,772,000 Engine maintenance $5,068,000 Domestic flights 7,837,500 International flights 23,512,500 Allocate the service department costs to the revenue-producing departments using air miles as the allocation base. Allocated to:
Domestic | International | |
---|---|---|
Ticketing | ||
Baggage Handling | ||
Maintanence | ||
Total |
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