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, Reno, and Portland. The owner of the airline wants to assess the full cost of operating 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

Maintenance Baggage

Flights

Salt Lake City Reno Portland

Budgeted data:

$\backslash$table$[[$Fixed overhead,$$240,000,$$$150,000,$$$20,000,$$$18,000,$$$30,000$