
Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin
Edition 7ISBN: 978-0073376301
Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin
Edition 7ISBN: 978-0073376301 Exercise 59
Jet Green Airways historically distributes the indirect costs of lost and damaged baggage to its three major hubs using a basis of annual number of flights in and out of each hub. Last year $667,500 was distributed as follows:
The airline's baggage management director suggests that an allocation on the basis of baggage traffic, not flights, will better represent the distribution, primarily based on the fact that the high fees now charged to passengers to check luggage have significantly changed the number of bags handled at the major hubs. Total number of bags handled during the year are 2,490,000 at DFW, 1,582,400 at YYZ, and 763,500 at MEX.
What are the percentage changes in allocation at each hub using the two different bases
The airline's baggage management director suggests that an allocation on the basis of baggage traffic, not flights, will better represent the distribution, primarily based on the fact that the high fees now charged to passengers to check luggage have significantly changed the number of bags handled at the major hubs. Total number of bags handled during the year are 2,490,000 at DFW, 1,582,400 at YYZ, and 763,500 at MEX.What are the percentage changes in allocation at each hub using the two different bases
Explanation
The formula to calculate the A...
Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin
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