Martini Hotel & Casino is situated on beautiful Lake Tahoe in Nevada. The complex includes a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Martini Hotel & Casino is situated on beautiful Lake Tahoe in Nevada. The complex includes a 300-room hotel, a casino, and a restaurant. As Martini's new controller, your manager asks you to recommend the basis the hotel should use for allocating fixed overhead costs to the three divisions in 2017. You are presented with the following income statement information for 2016: (Click the icon to view the data.) You are also given the following data on the three divisions. (Click the icon to view the data.) You are told that you may choose to allocate indirect costs based on one of the following: direct costs, floor space, or the number of employees. Total fixed overhead costs for 2016 were $14,580,000. Read the requirements Requirement 1. Calculate division margins in percentage terms prior to allocating fixed overhead costs. (Round your answers to two decimal places, X.XX.) Division margin Hotel Restaurant Casino % % Data Table Hotel Restaurant Casino Revenues $ Direct costs 17,592,000 $ 9,750,000 7,842,000 $ 5,520,000 $ 3,964,800 1,555,200 $ 12,370,000 4,624,900 7,745,100 Segment margin Data Table Print Done Floor space (square feet) Number of employees Hotel Restaurant 125,000 25,000 280 70 Casino 100.000 350 Requirements Print Done X X 1. Calculate division margins in percentage terms prior to allocating fixed overhead costs. 2. Allocate indirect costs to the three divisions using each of the three allocation bases suggested. For each allocation base, calculate division operating margins after allocations, in dollars and as a percentage of revenues. 3. Discuss the results. How would you decide how to allocate indirect costs to the divisions? Why? 4. Would you recommend closing any of the three divisions (and possibly reallocating resources to other divisions) as a result of your analysis? If so, which division would you close and why? Print Done X A Hotel Restaurant Casino Revenues Directs costs Segment margin Fixed costs Income before taxes Division margin % $17,592,000.00 $5,520,000.00 $12,370,000.00 $35,482,000.00 $ 9,750,000.00 $3,964,800.00 $ 4,624,900.00 $18,339,700.00 $ 7,842,000.00 $1,555,200.00 $ 7,745,100.00 $17,142,300.00 $ 14,580,000.00 $ 2,562,300.00 Martini Hotel & Casino is situated on beautiful Lake Tahoe in Nevada. The complex includes a 300-room hotel, a casino, and a restaurant. As Martini's new controller, your manager asks you to recommend the basis the hotel should use for allocating fixed overhead costs to the three divisions in 2017. You are presented with the following income statement information for 2016: (Click the icon to view the data.) You are also given the following data on the three divisions. (Click the icon to view the data.) You are told that you may choose to allocate indirect costs based on one of the following: direct costs, floor space, or the number of employees. Total fixed overhead costs for 2016 were $14,580,000. Read the requirements Requirement 1. Calculate division margins in percentage terms prior to allocating fixed overhead costs. (Round your answers to two decimal places, X.XX.) Division margin Hotel Restaurant Casino % % Data Table Hotel Restaurant Casino Revenues $ Direct costs 17,592,000 $ 9,750,000 7,842,000 $ 5,520,000 $ 3,964,800 1,555,200 $ 12,370,000 4,624,900 7,745,100 Segment margin Data Table Print Done Floor space (square feet) Number of employees Hotel Restaurant 125,000 25,000 280 70 Casino 100.000 350 Requirements Print Done X X 1. Calculate division margins in percentage terms prior to allocating fixed overhead costs. 2. Allocate indirect costs to the three divisions using each of the three allocation bases suggested. For each allocation base, calculate division operating margins after allocations, in dollars and as a percentage of revenues. 3. Discuss the results. How would you decide how to allocate indirect costs to the divisions? Why? 4. Would you recommend closing any of the three divisions (and possibly reallocating resources to other divisions) as a result of your analysis? If so, which division would you close and why? Print Done X A Hotel Restaurant Casino Revenues Directs costs Segment margin Fixed costs Income before taxes Division margin % $17,592,000.00 $5,520,000.00 $12,370,000.00 $35,482,000.00 $ 9,750,000.00 $3,964,800.00 $ 4,624,900.00 $18,339,700.00 $ 7,842,000.00 $1,555,200.00 $ 7,745,100.00 $17,142,300.00 $ 14,580,000.00 $ 2,562,300.00
Expert Answer:
Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan
Posted Date:
Students also viewed these accounting questions
-
Suppose Walmart buys sells salmon from Alaska. The salmon had the following journey: Fishing close to Alaska, immediate freezing on the ship (the ship has costs of $8,000 per day and produces 20,000...
-
Cougar Inc. has the following standard and actual costs based on a a budgeted operating level of 10,000 units and an actual operating level of 10,500 units. Cougar Inc. Costs Cost Standard Actual...
-
Rembrandt Hotel & Casino is situated on beautiful Lake Tahoe in Nevada. The complex includes a 300-room hotel, a casino, and a restaurant. As Rembrandt's new controller, your manager asks you to...
-
An increase in the supply of U.S. dollars by the Federal Reserve will raise the value of the dollar because it will stimulate U.S. economic growth raise the value of the dollar because it will lead...
-
A good friend of Daves informed him that the company he works for will announce a new product that will revolutionize the industry the friend works in. Dave is very excited about the prospective jump...
-
Evaluate three of the main elements of both lean thinking and JIT. How can these concepts be used for effective planning and control of an operation? How are these two concepts different? How can the...
-
What are the issues in interpersonal communication?
-
A study of Kickstarter projects showed that 54.2% were successful, that is, achieved its goal and raised at least the targeted goal amount. In an effort to identify network dynamics that influences...
-
Assuming 7x+4y2 dy dy - - 3xy = 0 defines y as a differentiable function of x, use the theorem == to find dx Fy dx | at the point (-1,1). dy dx (-1,1) (Type an integer or a simplified fraction.)
-
Here are selected data for Crumb? Company: Cost of goods manufactured $320,500 Work in the process? inventory, beginning $109,300 Work in process? inventory, ending $104,700 Direct materials used...
-
Suppose you have been hired as a consultant by Stevens Steel. Stevens Steel has prepared the following estimates for a long-term project it is considering. The initial investment is $35,510, and the...
-
Using either a tape measure or a ruler, make a measurement of your height in metres. Give your answer to three decimal places (i.e. to the nearest millimetre). Does this question make sense to...
-
What mechanisms influence the evolution of group cohesion, solidarity, and collective identity over time?
-
"The influence of employee motivation and engagement on organizational performance" Construct a literature review for above research topic Search for relevant literature. Evaluate sources. Identify...
-
what ways can team composition and diversity influence team performance and creativity, and what are the challenges and opportunities associated with managing diverse perspectives and backgrounds...
-
Represente grficamente los resultados obtenidos en el muestreo realizado en una manufacturera para medir que la maquinaria se encuentra apagada. Indique el mayor y menor valor que pueden tener los...
-
Access the Federation of Tax Administrators Internet site at www. taxadmin.org/state-tax-forms and indicate the titles of the following state tax forms and publications: a. Minnesota Form M-100 b....
-
Andreas Delons Compensation. Andreas Delon is a French citizen who has been offered the position of CEO of LakePharma, a large French pharmaceuticals firm. LakePharma produces high-quality chemicals...
-
EuroVirtuals EPS Sensitivity to Exchange Rates (A). On January 15, 2015 the Swiss National Bank (SNB) decided to unpeg the franc, which was fixed at CHF1.20/ since 2011. Suppose the SNB was to...
-
EuroVirtuals Consolidated Earnings. EuroVirtual pays different tax rates for each of its country operations. a. What are its earnings per share in EUR after deducting taxes? b. What is the proportion...
Study smarter with the SolutionInn App