The unallocated income statement of De Souza Motel is shown below: Rooms F&B Total Revenue 257,000 133,000 390,000 Cost of Sales 48,000 48,000 Payroll and Related Expenses 60,000 30,000 90,000 Other Direct Expenses 40,000 12,000 52,000 Total Expenses 100,000 90,000 190,000 Departmental Income 157,000 43,000 200,000 Administrative &General 60,000 Sales&Marketing 25,000 POM&Utility costs 20,000 GOP 95,000 Insurance 10,000 Depreciation 12,000 Total Fixed Charges 22,000 Income Before Income Taxes 73,000 Income Taxes 30,000 Net Income 47,000 Square Footage: Rooms- 120,000; F&B- 70,000 Required: 1.Which costs are indirect costs? Explain why! 2.Using square footage and the unallocated income statement , prepare a fully allocated income statement. 3.What do the results from part 2 suggest? Support your answer with numbers.
The unallocated income statement of De Souza Motel is shown below:
|
|
Rooms |
F&B |
Total |
|
Revenue |
257,000 |
133,000 |
390,000 |
|
Cost of Sales |
|
48,000 |
48,000 |
|
Payroll and Related Expenses |
60,000 |
30,000 |
90,000 |
|
Other Direct Expenses |
40,000 |
12,000 |
52,000 |
|
Total Expenses |
100,000 |
90,000 |
190,000 |
|
Departmental Income |
157,000 |
43,000 |
200,000 |
|
Administrative &General |
|
|
60,000 |
|
Sales&Marketing |
|
|
25,000 |
|
POM&Utility costs |
|
|
20,000 |
|
GOP |
|
|
95,000 |
|
Insurance |
|
|
10,000 |
|
|
|
|
12,000 |
|
Total Fixed Charges |
|
|
22,000 |
|
Income Before Income Taxes |
|
|
73,000 |
|
Income Taxes |
|
|
30,000 |
|
Net Income |
|
|
47,000 |
Square Footage: Rooms- 120,000; F&B- 70,000
Required:
1.Which costs are indirect costs? Explain why!
2.Using square footage and the unallocated income statement , prepare a fully allocated income statement.
3.What do the results from part 2 suggest? Support your answer with numbers.
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