Pacific airlines has three service departments ticketing

Reference no: EM13600024

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 are as follows: Ticketing$4,000,000Baggage handling$2,000,000Aircraft maintenance$6,000,000 Air miles are as follows: Domestic5,000,000International20,000,000

(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?

Reference no: EM13600024

Questions Cloud

On december 5 the store received 500 from the jackson : liability entries and adjustments listed below are selected transactions of schultz department store for the current

Isabelle inc uses a budgeted factory overhead rate to apply : isabelle inc. uses a budgeted factory overhead rate to apply overhead to production. the following data are available

Holiday company issued its 9 25-year mortgage bonds in the : holiday company issued its 9 25-year mortgage bonds in the principal amount of 3000000 on january 2 1996 at a discount

The property plant and equipment account is stated at cost : you are reviewing the december 31 2011 financial statements of ellies antiques that is considering an initial public

Pacific airlines has three service departments ticketing : pacific airlines has three service departments ticketing baggage handling and aircraft maintenance. costs of these

Cody doerr transferred cash from a personal bank account to : on october 1 2010 cody doerr established banyan realty which complteted the following transactions during the montha.

Calculate the cost and schedule variances and indexes cv sv : the following data were obtained from a project to design a new software package activity duration predecessors

What is the amount of the payments that ned winslow must : using the appropriate interest table provide the solution to each of the following four questions by computing the

If abc staffing believes it can charge 80 per hour instead : abc staffing company has been traditionally focused on legal and accounting staffing and is dterming if it should start

User Account

All Pages