Q1. Spaghetti is a family-owned restaurant in KSA.The corporate office provides 2 kinds of services (maintenance and personnel) to 3 locations (Riyadh, Jeddah and Dammam).

In a recent accounting period, the cost for maintenance was $25,000 and for personnel was $15,000.Maintenance costs are allocated on the basis of square feet, and personnel costs are allocated based on the basis of number of employees.

Number of

Square FeetEmployees

Support Departments:

Maintenance1,00015

Personnel1,0008

Operating Departments:

Riadh5,00012

Jeddah6,00018

Dammam3,00010

If the restaurant uses the direct method and the costs of Riadh location, Jeddah location and Dammam location are $15,000, $12,000 and $10,000 respectively, calculate the total costs allocated to each restaurant location.

Answer rating: 100% (QA)

Answer To solve this problem we need to allocate the service department costs maintenance and person... View the full answer