Airporter Service Company operates scheduled coach service formBoston\'s Logan A

Question

Airporter Service Company operates scheduled coach service formBoston's Logan Airport to downtown Boston and to Cambridge. Acommon scheduling service center at the airport is responsible forticketing and customer service for both routes. The servicecenter is regularly staffed to service traffic of 2,400 passengersper week: two-thirds for downtown Boston passengers and thebalance for Cambridge passengers. The cost to operate thisservice center is 7,200 per week normally, but it is higher duringweeks when additional help is required to service higher trafficlevels. The service center costs and number of passengersserviced during the 5 weeks of August follow:

Week        Cost                BostonPassengers            Cambridge Passengers
1               7,200                  1,600                                  800
2               7,200                   1,500                                 900
3                7,600                   1,650                                 800
4                7,800                  1,700                                  850
5                 7,200                 1,700                                   700

a. How much of the service center costs should be charged tothe Boston servicve and how much to the Cambridge service?

Explanation / Answer

x.Xhave three alternatives to allocate service center cost to passengers namely :

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