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. Assume the call volume for Prattville increases to 22,000. The amount of customer service (reservation) costs are allocated to locations based on the number of calls at each location. Which of the following would be true regarding the allocation of customer service costs?

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. Assume the call volume for Prattville increases to 22,000. The amount of customer service (reservation) costs are allocated to locations based on the number of calls at each location. Which of the following would be true regarding the allocation of customer service costs?

Quizplus · Accepted Answer

When the call volume for Prattville increases, the proportion of calls from other locations like Huntsville would decrease, leading to a decrease in their allocated customer service costs.