Stuart Airlines is a small airline that occasionally carries overload shipments for the overnight delivery company Never-Fail, Inc. Never-Fail is a multimillion-dollar company started by Wes Never immediately after he failed to finish his first accounting course. The company's motto is "We Never-Fail to Deliver Your Package on Time." When Never-Fail has more freight than it can deliver, it pays Stuart to carry the excess. Stuart contracts with independent pilots to fly its planes on a per-trip basis. Stuart recently purchased an airplane that cost the company $6,192,000. The plane has an estimated 'useful life of 25,800,000 miles and a zero salvage value. During the first week in January, Stuart flew two trips. The first trip was a round trip flight from Chicago to San Francisco, for which Stuart paid $350 for the pilot and $300 for fuel. The second flight was a round trip from Chicago to New York. For this trip, it paid $300 for the pilot and $150 for fuel. The round trip between Chicago and San Francisco is approximately 4,600 miles and the round trip between Chicago and New York is 1,900 miles. Required a. Select if the costs mentioned below are direct or indirect. b. Determine the total cost of each trip. Required A Required B Select if the costs mentioned below are direct or indirect. Pilot Fuel Depreciation Required A Required B Determine the total cost of each trip. (Do not round intermediate calculations.) Chicago to San Francisco Chicago to New York Total cost
Stuart Airlines is a small airline that occasionally carries overload shipments for the overnight delivery company Never-Fail, Inc. Never-Fail is a multimillion-dollar company started by Wes Never immediately after he failed to finish his first accounting course. The company's motto is "We Never-Fail to Deliver Your Package on Time." When Never-Fail has more freight than it can deliver, it pays Stuart to carry the excess. Stuart contracts with independent pilots to fly its planes on a per-trip basis. Stuart recently purchased an airplane that cost the company $6,192,000. The plane has an estimated 'useful life of 25,800,000 miles and a zero salvage value. During the first week in January, Stuart flew two trips. The first trip was a round trip flight from Chicago to San Francisco, for which Stuart paid $350 for the pilot and $300 for fuel. The second flight was a round trip from Chicago to New York. For this trip, it paid $300 for the pilot and $150 for fuel. The round trip between Chicago and San Francisco is approximately 4,600 miles and the round trip between Chicago and New York is 1,900 miles. Required a. Select if the costs mentioned below are direct or indirect. b. Determine the total cost of each trip. Required A Required B Select if the costs mentioned below are direct or indirect. Pilot Fuel Depreciation Required A Required B Determine the total cost of each trip. (Do not round intermediate calculations.) Chicago to San Francisco Chicago to New York Total cost
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
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Author:Don R. Hansen, Maryanne M. Mowen
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Chapter17: Activity Resource Usage Model And Tactical Decision Making
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Transcribed Image Text:Stuart Airlines is a small airline that occasionally carries overload shipments for the
overnight delivery company Never-Fail, Inc. Never-Fail is a multimillion-dollar company
started by Wes Never immediately after he failed to finish his first accounting course. The
company's motto is "We Never-Fail to Deliver Your Package on Time." When Never-Fail
has more freight than it can deliver, it pays Stuart to carry the excess. Stuart contracts
with independent pilots to fly its planes on a per-trip basis. Stuart recently purchased an
airplane that cost the company $6,192,000. The plane has an estimated useful life of
25,800,000 miles and a zero salvage value. During the first week in January, Stuart flew
two trips. The first trip was a round trip flight from Chicago to San Francisco, for which
Stuart paid $350 for the pilot and $300 for fuel. The second flight was a round trip from
Chicago to New York. For this trip, it paid $300 for the pilot and $150 for fuel. The round
trip between Chicago and San Francisco is approximately 4,600 miles and the round trip
between Chicago and New York is 1,900 miles.
Required
a. Select if the costs mentioned below are direct or indirect.
b. Determine the total cost of each trip.
Required A Required B
Select if the costs mentioned below are direct or indirect.
Pilot
Fuel
Depreciation
Required A Required B
Determine the total cost of each trip. (Do not round intermediate calculations.)
Chicago to San
Francisco
Chicago to
New York
Total cost
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