Quick Transportation operates local taxi service and bus transportation across a region. To provide superior service...

 

Transcribed Image Text:

Quick Transportation operates local taxi service and bus transportation across a region. To provide superior service Quick operates its own service station. Maintaining schedules, bookings, and other administrative functions are provided by administrative services. Costs incurred over the last six months: Required: a. Allocate costs of administrative and service station using 1. The direct method of allocation. 2. The step-down method. Assume administrative is allocated first. 3. The reciprocal method of allocation. Costs Number of km travelled Administrative time Administrative $150,000 15,000 Service Station Taxi $725,000 15% 350,000 150,000 45% Bus transportation 600,000 235,000 40% Quick Transportation operates local taxi service and bus transportation across a region. To provide superior service Quick operates its own service station. Maintaining schedules, bookings, and other administrative functions are provided by administrative services. Costs incurred over the last six months: Required: a. Allocate costs of administrative and service station using 1. The direct method of allocation. 2. The step-down method. Assume administrative is allocated first. 3. The reciprocal method of allocation. Costs Number of km travelled Administrative time Administrative $150,000 15,000 Service Station Taxi $725,000 15% 350,000 150,000 45% Bus transportation 600,000 235,000 40%