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:
Locations
Danville
Huntsville Niceville Prattville Total
Budgeted Number of Trips Sold 400 300 300 200 1,200
Actual Number of Trips Sold 450 250 420 180 1,300
Budgeted Average Sales Revenue
per Trip $100.00 $90.00 $100.00 $110.00
Actual Average Sales Revenue per
Trip $115.00 $85.00 $120.00 $105.00
Budgeted Average Variable cost
per Trip $50.00 $30.00 $35.00 $40.00
Actual Average Variable cost per
Trip $52.00 $47.00 $36.00 $38.00
Budgeted Fixed Costs by Location $11,000 $9,000 $10,000 $10,000 $40,000
Actual Fixed Costs by Location $10,500 $9,500 $10,000 $10,200 $40,200
Budgeted Traceable Accounting
Costs $5,500 $5,500 $5,500 $5,500 $22,000
Actual Reports Requested from
Accounting 50 40 60 50 200
Budgeted Traceable Customer
Service Costs $9,000 $5,500 $3,500 $3,500 $21,500
Actual Calls by Location 12,000 15,000 21,000 12,000 60,000
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. Which is the best method to allocate traceable accounting costs?
A) Operating Income B) Number of calls by location
C) Number of reports requested D) Contribution Margin

C