2 Konig Enterprises, Ltd., owns and operates three restaurants in Vancouver, B.C. The company allocates its fixed administrative expenses to the three restaurants on the basis of sales dollars. Last year the fixed administrative expenses totaled $940,000 and were allocated as follows: Total sales-Last Year Percentage of total sales Allocation (based on the above percentages) Rick's Harborside $19,320,000 429 Restaurants Imperial Garden $12,000,000 201 Ginger Mok $13,800,000 Total $46,000,000 100% 30% 394,000 $ 263,200 $ 282,000 4 940,000 This year the Imperial Garden restaurant increased its sales by $1 million. The sales levels in the other two restaurants remained unchanged. The company's sales data for this year were as follows: Total sales-This Year Percentage of total sales Rick's Harborside $19,320,000 414 Restaurants Imperial Carden $13,000,000 Ginger Mok Total $13,000,000 $47,000,000 30% 296 100% Fixed administrative expenses for this year remained unchanged at $940,000. 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? Check