Case Study

You have the following annual information about Moonlight Bar and Grill, which consists of three different operating segments.

The owner wants to allocate indirect costs to each area based on square footage, to analyze how each segment of the restaurant is performing. The dining room is 3,300 square feet, the bar area is 1,500 square feet and the outdoor patio is 1,200 square feet.

Required

a) Allocate the indirect costs as indicated.

Moonlight Bar and Grill Income Statement For the Year Ended December 31, 2020 Dining Room OutdoorPatio $206,900 5156.800 5186.000 5549.700 Contribution Income __ _ _ 11800 _ 34000 88,700 Indirect Costs m