1. A hospitality company allocates overhead costs: Administration $500,000, Marketing $300,000, allocated to Rooms and Food & Beverage departments.
   • Requirements:
     • Determine the most appropriate cost allocation method (direct, step-down, reciprocal) for the company.
     • Allocate overhead costs to Rooms and Food & Beverage departments using the chosen method.
     • Prepare a cost allocation report showing allocated costs for each department.
     • Discuss the ethical considerations in selecting and applying cost allocation methods.
     • Evaluate the impact of accurate cost allocation on financial reporting and decision-making in the hospitality industry.