Woodland Hotels Incorporated operates four resorts in the heavily wooded areas of northern California. The resorts are named after the predominant trees at the resort: Pine Valley, Oak Glen, Mimosa, and Birch Glen. Woodland allocates its central office costs to each of the four resorts according to the annual revenue the resort generates. For the current year, the central office costs (000s omitted) were as follows: $ 9,000 Front office personnel (desk, clerks, etc.) Administrative and executive salaries 4, see 3, 5ee 600 Interest on resort purchase Advertising Housekeeping Depreciation on reservations computer Room maintenance 2,5e0 80 900 Carpet-cleaning contract Contract to repaint rooms 50 450 $ 21,580 Pine Valley Oak Glen $ 6,358 58, 065 Mimosa Birch Glen $ 9,498 8e, 190 $ 10,515 43,720 66 $ 7,775 87,560 174 Total $ 34,130 269,535 448 Revenue (000s) Square feet Rooms 86 122 Assets (000s) $ 96,660 $ 143,160 $ 75,730 $ 60,175 $ 375,725 Requlred: 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.
Woodland Hotels Incorporated operates four resorts in the heavily wooded areas of northern California. The resorts are named after the predominant trees at the resort: Pine Valley, Oak Glen, Mimosa, and Birch Glen. Woodland allocates its central office costs to each of the four resorts according to the annual revenue the resort generates. For the current year, the central office costs (000s omitted) were as follows: $ 9,000 Front office personnel (desk, clerks, etc.) Administrative and executive salaries 4, see 3, 5ee 600 Interest on resort purchase Advertising Housekeeping Depreciation on reservations computer Room maintenance 2,5e0 80 900 Carpet-cleaning contract Contract to repaint rooms 50 450 $ 21,580 Pine Valley Oak Glen $ 6,358 58, 065 Mimosa Birch Glen $ 9,498 8e, 190 $ 10,515 43,720 66 $ 7,775 87,560 174 Total $ 34,130 269,535 448 Revenue (000s) Square feet Rooms 86 122 Assets (000s) $ 96,660 $ 143,160 $ 75,730 $ 60,175 $ 375,725 Requlred: 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.
Cornerstones of Cost Management (Cornerstones Series)
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ISBN:9781305970663
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Chapter7: Allocating Costs Of Support Departments And Joint Products
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Transcribed Image Text:Woodland Hotels Incorporated operates four resorts in the heavily wooded areas of northern California. The resorts are named after
the predominant trees at the resort: Pine Valley. Oak Glen, Mimosa, and Birch Glen. Woodland allocates its central office costs to each
of the four resorts according to the annual revenue the resort generates. For the current year, the central office costs (000s omitted)
were as follows:
Front office personnel (desk, clerks, etc.)
Administrative and executive salaries
Interest on resort purchase
Advertising
Housekeeping
Depreciation on reservations computer
Room maintenance
$ 9,800
4,500
3,500
600
2,500
80
900
Carpet-cleaning contract
Contract to repaint rooms
50
450
$ 21,580
Pine Valley Oak Glen
$ 6,350
58,065
Mimosa
$ 18,515
43,720
66
Total
$ 34,130
269,535
Birch Glen
Revenue (00es)
Square feet
$ 9,490
8е,198
$ 7,775
87,560
174
Rooms
86
122
448
Assets (000s)
$ 96,660
$ 143,160
$ 75,730
$ 60,175
$ 375,725
Requlred:
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
Based on annual revenue, what amount of the central office costs are allocated to each resort? (Do not round intermediate
calculations. Enter your ansvers in thousands rounded to the nearest dollar.)
Pine Valley
Oak Glen
Mimosa
Birch Glen
Total
Allocated cost
Required 1
Required 2 >
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