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:
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Budgeted Data
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Costs
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Air Miles
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Ticketing
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$4,756,000
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Baggage handling
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$2,848,000
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Engine maintenance
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$5,884,000
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Domestic flights
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7,637,500
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International flights
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22,912,500
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Allocate the service department costs to the revenue-producing departments using air miles as the allocation base.
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Allocated to
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Domestic
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International
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Ticketing
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$
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$
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Baggage handling
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Maintenance
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Total
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$
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$
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