Q3: Cost Allocation [20 Marks] 3. Identifies two (2) important considerations when communicating these cost calculations to the Head of Ground Operations and the Head of Australian Medical Airlines is a small freight company that distributes medical Flight Operations. [5 marks] supplies by air around Australia. It has three support departments; 1) Finance/Accounting, 2) Reservations and Scheduling and 3) IT, and two operating departments; Ground Operations and Flight Operations. The following table outlines the total budgeted cost for each department: Departments Cost Finance/Accounting $170 000 Reservations and Scheduling $120 000 Information Technology Services $200 000 (IT) Ground Operations $400 000 Flight Operations $650 000 The following table outlines how much each operating department uses the support department's services. Support Departments Operations Departments Support Reservatio Finance IT Ground Flight Department ns and /Accounting Operations Operations S Scheduling Finance 20% 40% 30% 10% /Accounting Reservations 0% 15% 20% 45% 20% and Scheduling IT 20% 30% 0% 30% 20% Required: Prepare a short report to the CFO of Australian Medical Airlines that: 1. Outlines the most accurate total budgeted cost of the two operations departments. [ 10 marks] 2. Includes a justification for the cost allocation method that you used