Trips to Remember, Inc. provides vacation trips to various locations around the world. The company's headquarters are located in Meadows Place, TX. The headquarters provide two main services to the four tourist locales: accounting and customer services (reservations).
Budget and actual data for each of the four tourist locations are as follows:

- The Accounting Services Department actually incurred $11,000 in accounting costs for May 2012. The Reservation Department incurred $23,000 in actual costs, of which $20,000 were traceable to the locations. What is the amount of customer service (reservation) costs allocated to the Prattville location, assuming customer service costs are allocated based on the number of calls at each location?

Question

Trips to Remember, Inc. provides vacation trips to various locations around the world. The company's headquarters are located in Meadows Place, TX. The headquarters provide two main services to the four tourist locales: accounting and customer services (reservations).
Budget and actual data for each of the four tourist locations are as follows:

- The Accounting Services Department actually incurred $11,000 in accounting costs for May 2012. The Reservation Department incurred $23,000 in actual costs, of which $20,000 were traceable to the locations. What is the amount of customer service (reservation) costs allocated to the Prattville location, assuming customer service costs are allocated based on the number of calls at each location?

Quizplus · Accepted Answer

The Prattville location incurred $3,500 in customer service costs. The total customer service costs are $20,000, and the Prattville location accounts for 35% of the total calls. Therefore, the Prattville location is allocated $3,500 in customer service costs.