dining room	bar area	outdoor patio	total
sales revenue	$206900	156800	186000	549700
direct costs	164000	145000	152000	461000
contribution income	42900	11800	34000	88700
indirect cost				63000
operation income				25700

the owner wants to allocate indrect costs to each area based on square footage to analyse how each segments of the restaurants is performing. the dining room 3300 square foot, the bar area is 1500 square foot and the outdoor patio is 1200 square foot .

required

A) allocate the indirect costs as indicated?

B) the owner of restaurant has an offer from smoothie shop to rent the bar area for $7000 per year. rent does not include any of the indirect costs; they will have to be absorbed by the other segments. prepare a revised income statement and advise the owner if this if an acceptable offer or not?