Question

Campbell 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 Campbell to carry the excess. Campbell contracts with independent pilots to fly its planes on a per-trip basis. Campbell recently purchased an airplane that cost the company $4,338,000. The plane has an estimated useful life of 24,100,000 miles and a zero salvage value. During the first week in January, Campbell flew two trips. The first trip was a round-trip flight from Chicago to San Francisco, for which Campbell 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 4,000 miles and the round trip between Chicago and New York is 1,200 miles.

Required

1. Select if the costs mentioned below are direct or indirect.

2. Determine the total cost of each trip.

Pilot Fuel Depreciation

Answer 1

Answer- A) select if Ite cors meulioued below are direct lors indivect. pilot fuel Depseciation D) Determine the total cost of each trip. Disect cost Disect Cost Inpireet cost chieago to New york chicago to sau francisco $1.370 $666 Total cost working Note:- |chicago to Sau fraucieo chieago to New york pibt cost puel.cost Deprecialioncest $ 720 $ 300 $ 350 $ 150 $ 300 * 216 $666 4338c00/24100000 $1370 Depreciation per mile = :: Depreciation per mile=$0.18 chickago to sandrancio oepreciation = HO00 X$0.18=$720 chicago to Newyork Depseciation %3D = 1200 xfo.18= $e16