Restaurants Rick's Imperial Ginger Wok Harborside Garden $16,040,000 34% Total Total sales-This Year $20,210,000 42% $11,750,000 24% $48,000,000 100% Percentage of total sales Fixed administrative expenses for this year remained unchanged at $970,000. Required: 1. Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for this year. 2. Calculate the change in each restaurant's allocated cost from last year to this year. 3. Is sales dollars a good base for allocation of fixed costs?

Restaurants Rick's Imperial Ginger Wok Harborside Garden $16,040,000 34% Total Total sales-This Year $20,210,000 42% $11,750,000 24% $48,000,000 100% Percentage of total sales Fixed administrative expenses for this year remained unchanged at $970,000. Required: 1. Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for this year. 2. Calculate the change in each restaurant's allocated cost from last year to this year. 3. Is sales dollars a good base for allocation of fixed costs?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.4.3MBA

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