Question
Bradley Company owns two adjoining restaurants, Restaurant A and Restaurant B. Each restaurant is treated as a profit center for performance evaluation purposes. The restaurants
Bradley Company owns two adjoining restaurants, Restaurant A and Restaurant B. Each restaurant is treated as a profit center for performance evaluation purposes. The restaurants have separate kitchens but share a central baking facility. Bradley Company allocates the monthly costs of the baking facility to the two restaurants based on the number of tables served in each restaurant using dual allocation and equal sharing of fixed costs. During the month, the costs were $100,000, of which $20,000 were fixed. Restaurant A served 3,200 tables while Restaurant B served 1,800 tables.
Compute the amount of joint cost that should have been allocated to Restaurant A.
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