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Requirement 1. Calculate design margins in percentage terms prior to allocating fixed overhead costs. (Round your answers to two decimal places, Hotel Restaurant Casino Division margin 47 95 % 41.57 % 64.80% Requirement 2. Allocate indirect costs to the three divisions using each of the three allocation bases suggested. For each allocation base, calculated operating margins after allocations, in dollars and as a percentage of revenues. Allocate the indirect costs, then calculate the dinsion operating margin in dollars and as a percentage of revenue for each segment. Begin with cost allocation based on direct costs. (Round percentages, including intermediate calculations, to two decimal places, XXX%. Round dollar in the nearest Hills Henranthene ne minute inn for nenntive amount to the nearest dollar. Use parentheses or a minus sign for negative amounts.) Hotel Restaurant Casino Bellini Allocated fixed overhead costs $ 8,020 890 5 3,063,035 3,556,074 $ 14,510,000 1053, 110 383 036) 4 485,826 Operating margin 5.155.900 Operating margin (6.01) 36.15 % Next, allocate costs based on floor space (Round percentages including intermediate calculations, to two decimal places, X X00% Round dollar amounts to the nearest dollar Use parentheses or a minus sign for negative amounts) 555 % Bellini $ $ 5 nearest dollar Use parentheses or a minus sign for negative amounts:) Hotel Restaurant Casino Allocated fixed overhead costs $ 7,305,000 1.461,000 5,844,000 14,610.000 1.789.000 1.189.000 2.197.900 Operating margin 5.155 900 Operating margin 9.35% 18.65% 17.71% Now allocate costs based on number of employees (Round percentages, including intermediate calculations, to two decimal places, XXX% Round doll amounts to the nearest dollar Use parentheses or a minus sign for negative amounts) Hotel Restaurant Casino Bellini Help me solve this Etext pages Get more help Similar qu Copyright 2022 Pearson Education Inc. All rights reserved. Terms Privacy Policy TermsSOTE 17:07 Hotel Restaurant Casino Bellini Allocated fixed overhead costs $ 5.844000 $ 1.461 000 $ 7 305 000 3 14.610.000 3,230,000 1189.000 736.900 Operating margin 5.155.900 Operating margin 18.65% 5.94% Requirement 3. Discuss the results. How would you decide to allocate indirect costs to the divisions? Why? There is a dramatic difference in the operating margin percentages depending upon which allocation base is chosen Where cost allocation is required, the cause-and-effect and benefits-received criteria are recommended. The 514 610,000 is fixed overhead cost. This means that on a short-ran basis, the . Help me solve this Etext pages Get more help Similar question Giotto Hotel & Casino is situated on beautiful Lake Tahoe in Nevada The complex includes a 300-room hotel, a casino, and a restaurant. As Giotto's new controller, your manager asks you to recommend the basis the hotel should use for allocating fixed overhead costs to the three divisions in 2020. You are presented with the following income statement information for 2019 Click the icon to view the data) You are also given the following data on the three divisions Click the icon to view the data) You are told that you may choose to allocate indirect costs based on one of the following direct costs, floor space, or the number of employees Total fixed overhead costs for 2019 were $14,570,000. Read the requirements Requirement 1. Calculate division margins in percentage terms prior to allocating fixed overhead costs. (Round your answers to two decimal places, XXC) Hotel Restaurant Casino Division margin You are also given the following data Data table Hotel Restaurant Casino Revenues $ 17,592,000 $ 9,725,000 7,150,000 $ 3,864,200 12.440,000 4,561,700 Direct costs $ 7,867,000 $ Segment margin 3,285,800 $ 7,878,300 Print Done ol - Data table Hotel Casino Restaurant 26,000 130.000 Floor space (square feet) Number of employees 104,000 300 240 an 60 ot Print Done 1 Requirements 1. Calculate division margins in percentage terms prior to allocating fixed overhead costs. 2. Allocate indirect costs to the three divisions using each of the three allocation bases suggested. For each allocation base, calculate division operating margins after allocations, in dollars and as a percentage of revenues. 3. Discuss the results. How would you decide how to allocate indirect costs to the divisions? Why? 4. Would you recommend closing any of the three divisions in the short run (and possibly reallocating resources to other divisions) as a result of your analysis? If so, which division would you close and why? Print Done