Question
Chilton Day School allocates marketing and administrative costs to its three schools based on total annual tuition revenue for the schools. Last year the allocations
Chilton Day School allocates marketing and administrative costs to its three schools based on total annual tuition revenue for the schools. Last year the allocations (000s omitted) were as follows:
Preschool | Middle School | High School | Total | |||||||||
Tuition revenue | $ | 1,500 | $ | 1,800 | $ | 2,200 | $ | 5,500 | ||||
Marketing and administration | 275 | 325 | 400 | 1,000 | ||||||||
In the current year, the middle and high schools experienced no change in revenues, but the preschools tuition revenue increased to $1.9 million. Marketing and administrative costs rose to $1,250,000.
Required:
1. Using revenue as an allocation base, how should the costs be allocated for the current year? (Do not round intermediate calculations. Enter your dollar answers in thousands rounded to 2 decimal places.)
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