FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Manji 

Benson Airlines is a small airline that occasionally carries overload shipments for the overnight delivery company Never-Fail,
Incorporated. 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 Benson to carry the excess. Benson contracts with independent pilots to fly its planes on a per-trip basis. Benson
recently purchased an airplane that cost the company $4,864,000. The plane has an estimated useful life of 25,600,000 miles and a
zero salvage value. During the first week in January, Benson flew two trips. The first trip was a round trip flight from Chicago to San
Francisco, for which Benson paid $290 for the pilot and $240 for fuel. The second flight was a round trip from Chicago to New York.
For this trip, it paid $240 for the pilot and $120 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 1,500 miles.
Required
a. Select if the costs mentioned below are direct or indirect.
b. Determine the total cost of each trip.
Complete this question by entering your answers in the tabs below.
Required A Required B
Select if the costs mentioned below are direct or indirect.
Pilot
Fuel
Depreciation
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Transcribed Image Text:Benson Airlines is a small airline that occasionally carries overload shipments for the overnight delivery company Never-Fail, Incorporated. 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 Benson to carry the excess. Benson contracts with independent pilots to fly its planes on a per-trip basis. Benson recently purchased an airplane that cost the company $4,864,000. The plane has an estimated useful life of 25,600,000 miles and a zero salvage value. During the first week in January, Benson flew two trips. The first trip was a round trip flight from Chicago to San Francisco, for which Benson paid $290 for the pilot and $240 for fuel. The second flight was a round trip from Chicago to New York. For this trip, it paid $240 for the pilot and $120 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 1,500 miles. Required a. Select if the costs mentioned below are direct or indirect. b. Determine the total cost of each trip. Complete this question by entering your answers in the tabs below. Required A Required B Select if the costs mentioned below are direct or indirect. Pilot Fuel Depreciation
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