Question

i need help with requirement 2

Carpet-cleaning contract Contract to repaint rooms 50 570 $28,710 Pine Valley $ 9,150 Birch Glen Oak Glen $ 13,675 88,765 Mimosa $ 15,150 48,415 Total $ 49,180 298,420 Revenue (00es) Square feet Rooms $ 11,205 96,950 64, 290 86 122 66 174 448 $415,965 Assets (000s) $107,015 $ 83,855 $158,465 $ 66,630 Required: 1. Based on annual revenue, what amount of the central office costs are allocated to each resort? 2. Suppose that the current methods were replaced with a system of four separate cost pools with costs collected in the four pools allocated on the basis of revenues, assets invested in each resort, square footage, and number of rooms, respectively. Which costs- should be collected in each of the four pools? 3. Using the cost pool system in requirement 2, how much of the central office costs would be allocated to each resort? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Suppose that the current methods were replaced with a system of four separate cost pools with costs collected in the four pools allocated on the basis of revenues, assets invested in each resort, square footage, and number of rooms, respectively. Which costs should be collected in each of the four pools? (Enter your answers in thousands of dollars.) Allocation Base Total Revenue Square feet Number of rooms Assets

Answer 1

Answer-1:

% of revenue Cost allocation Resorts Revenue to Total revenue 9,150 9,150/49,180 × 100 = 13,675 13,675/49,180 x 100 = 15,150 15,150/49,180 x 100 = 11,205 11,205/49,180 x 100 = 18.61 $ 5,341,531 27.81 $ 7,983,108 30.81 $ 8,844,174 22.78 $ Pine Valley Oak Glen Mimosa Birch Glen 6,541,186 $ 28,710,000 Total 49,180

Answer-2:

Cost allocation in each of the four pools:

(in 000s) 12,100 Revenue 5,700 Revenue 4,700 Assets 600 Revenue 3,700 Rooms 80 Assets 1,210 Rooms 50 Square feet 570 Rooms Front office personnel (desk, clerks, etc.) $ Administrative and executive salaries Interest on resort purchase Advertising Housekeeping Depreciation on reservations computer Room maintenance Carpet-cleaning contract Contract to repaint rooms Total $ 28,710

Answer-3:

Central Cost allocation:

Total Cost (000s] $ 18,400 9,150/49,180x18,400= 50 64,290/298,420x50= $ 5,480 86/448×5,480= $ 4,780 107,015/415,965x4,780= | $1,230 158,465/415,965x4,780= $1,821 83,855/415,965x4,780= $ 28,710 Pine Valley Oak Glen Birch Glen Mimosa Revenue $5,668 11,205/49,180x18,400= 8 96,950/298,420x50= $ 807 174/448×5,480= $ 964 66,630/415,965x4,780= $4,192 | $ 18,400 $ 16 $ $2,128 $ 5,480 $ 766 $ 4,780 $3,423 13,675/49,180x18,400= 11 88,765/298,420x50= $1,052 122/448×5,480= $5,116 15,150/49,180x18,400= $ 15 48,415/298,420x50= $1,492 66/448×5,480= Square feet $ Rooms 2$ 50 Assets $28,710 Total