World airlines has three service departments

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Reference no: EM13919298

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		$4,756,000
Baggage handling		$2,848,000
Engine maintenance		$5,884,000
Domestic flights			7,637,500
International flights			22,912,500

Allocate the service department costs to the revenue-producing departments using air miles as the allocation base.

		Allocated to
		Domestic	International
Ticketing		$	$
Baggage handling
Maintenance
	Total	$	$

Reference no: EM13919298

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