- Chapter 07 Homework Ebook O Direct Method Variable Versus Fixed Costing And Performance Evaluation Airborne Is A Smal 1 (118.18 KiB) Viewed 83 times
Chapter 07 Homework eBook O Ⓒ Direct Method, Variable versus Fixed Costing and Performance Evaluation AirBorne is a small airline operating out of Boise, Idaho. Its three flights travel to Salt Lake City, Rana, and Portland. The owner of the airline wants to assess the full cost of aparating each flight. As part of this assessment, the costs of two support departments (maintenance and baggage) must be allocated to the three flights. The two support departments that support all three flights are located in Boise (any maintenance or baggage costs at the destination airports are directly traceable to the Individual flights). Budgeted and actual data for the year are as follows for the support departments and the three flights: Use the rounded values for subsequent calculations. Support Centers Flights Reno Maintenance Baggage Salt Lake City Portland Budgatad data: Fixed overhead $240,000 $30,000 $150,000 $64,000 $20,000 55,000 $18,000 $10,000 Variable overhead $30,000 6,000 Hours of flight time 2,000 4,000 2,000 Number of passengers 10,000 15,000 5,000 Actuel data: Fixed overhead $235,000 $156,000 $22,000 $17,000 $29,500 Variable overhead $80,000 $33,000 $5,200 $11,000 $5,900 Hours of flight time 1,800 4,200 2,500 Number of passengers 8,000 16,000 6,000 "Normal activity levels. Round all allocation ratios and variable rates to four significant digits. Round all allocated amounts to the nearest dollar. Required: 1. Using the direct method, allocate the support service costs to each flight, assuming that the objective is to determine the cost of operating each flight. Allocation ratios for fixed costs SLC Reno Portland Hours of flight time 67,500 X Number of passengers Vadable zadani Check My Work Previous Next Assignment Score: 66.82% Email Instructor Save and Exit Submit Assignment for Grading
Chapter 07 Homework Maintenance: Baggage: Cost Allocation SLC Reno Portland $ 60,000 ✓ 120,000 $ 60.000 ✔ Maintenance-fixad: Maintenance-variable: 7,500 ✔ 15,000 ✓ 7,500 ✓ Baggage-fixed: 75,000 ✓ Baggage variable 32,000 ✓ 10,667 ✔ 21,333 ✔ $ s 242.000 ✓ E 2. Using the direct method, allocate the support service costs to each flight, assuming that the objective is to evaluate performance. SLC Reno Portland Maintenance-fixed: Maintenance-variable: Baggage fixed: Beggage-variable: $315,000 X $ E Fil Check My Work 1. For product costing, the allocation is done at the beginning of the year on the basis of budgeted usage so that a predetermined overhead rata can be computed. 2. For performance evaluation, the allocation is done at the end of the period and is based on actual usage. Check My Work Assignment Score: 66.82% eBook per flight hour per passenger Email Instructor Save and Exit Previous Next Submit Assignment for Grading ņ Ⓒ