+1-415-670-9189
info@expertsmind.com
Evaluate world airlines use of air miles
Course:- Managerial Accounting
Reference No.:- EM13182323




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Managerial Accounting

Pacific Airlines has three service departments; ticketing, baggage handling, and aircraft maintenance. Costs of these departments are allocated to two revenue producing departments, domestic and international flights. Costs for the service departments are not separated into fixed and variable and the totals areas follows:

Ticketing $4,000,000
Baggage handling $2,000,000
Aircraft maintenance $6,000,000

Air miles are as follows:
Domestic 10,000,000
International 30,000,000

(a) Allocate the service department costs based on air miles.
(b) Evaluate World Airlines use of air miles as a basis for allocation. Do you think the cause-and-effect relationship is strong?
(c) Suggest alternative methods toallocate the servicedepartment costs.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Managerial Accounting) Materials
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases. Prepare a cash budget for January and February in colum
Given Mountainarious Sporting Co.'s financial statements for the period 2004 to 2007 you are to undertake appropriate vertical, horizontal and ratio analysis of those financ
ACC702 Managerial Accounting Assignment Task Specification. Describe how management control theory and concepts apply to organisational settings through the generation of acc
Compute the equivalent units for direct materials and conversion costs for December. Compute the unit costs for direct materials and conversion costs. Compute the cost of unit
Prepare a sales budget, by month and in total, for the third quarter. Also prepare a schedule of expected cash collections, by month and in total, for the third quarter.
Making sense of company executives' compensation and employee benefits through the lens of cultural effects. How the conceptual framework revision to include Prudence is lik
Analyse the annual reports of your chosen companies in light of the standard requirements -  Compare and contrast the two annual reports, identify the differences in disclosu
A plant produces 75 different electronic products. Each product requires an average of six components that are purchased externally. Calculate the nonvalue-added cost of purc