Fall 2020 ACCT 3220 - 3 Homework: chapter 14 1 of 1 (1 cc Score: 0.64 of 10 pts E14-23 (similar to) Donatello Hotel & Casino is situated on beautiful Lake Tahoe in Nevada. The complex includes a 300-room hotel, a casino, and a restaurant. As Donatello'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 2017. You are presented with the following income statement information for 2016. (Click the icon to view the data.) Save complete) HW Score: 6 38%, 0.64 of 10 pts Question Help a You are also given the following data on the three divisions. E88 (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 2016 were $14,640,000 Read the requirements. ox.com/student/PlayerHomework aspomewon bor oyuusu 020 ACCT 3220.3 mework: chapter 14 0.64 of 10 pts 1 of 1 (1 complete) Data Table Data Table 120 Casino Restaurant 23,000 Revenues Casino 92000 s Hotel Restaurant 19 654 000 $ 6,375,000 $ 9.750,000 3,864.200 9.904,000 $ 2.510,800 $ Hotel 115,000 160 12.440.000 4.392 300 Floor space (square feet) Number of employees 40 200 Direct costs $ 8,047,700 Segment margin Print Done Print Done halculations, to two decimal places. X.XX%. Round dollar amounts to the nearest dolla ts Read the requirements. 00 $ 00 12.440,000 4.392,300 Requirements - X ing ther TI 8 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 (and possibly reallocating resources to other divisions) as a result of your analysis? If so, which division would you close and why? 9 9 Print Done 00 Fall 2020 ACCT 3220 - 3 Homework: chapter 14 1 of 1 (1 cc Score: 0.64 of 10 pts E14-23 (similar to) Donatello Hotel & Casino is situated on beautiful Lake Tahoe in Nevada. The complex includes a 300-room hotel, a casino, and a restaurant. As Donatello'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 2017. You are presented with the following income statement information for 2016. (Click the icon to view the data.) Save complete) HW Score: 6 38%, 0.64 of 10 pts Question Help a You are also given the following data on the three divisions. E88 (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 2016 were $14,640,000 Read the requirements. ox.com/student/PlayerHomework aspomewon bor oyuusu 020 ACCT 3220.3 mework: chapter 14 0.64 of 10 pts 1 of 1 (1 complete) Data Table Data Table 120 Casino Restaurant 23,000 Revenues Casino 92000 s Hotel Restaurant 19 654 000 $ 6,375,000 $ 9.750,000 3,864.200 9.904,000 $ 2.510,800 $ Hotel 115,000 160 12.440.000 4.392 300 Floor space (square feet) Number of employees 40 200 Direct costs $ 8,047,700 Segment margin Print Done Print Done halculations, to two decimal places. X.XX%. Round dollar amounts to the nearest dolla ts Read the requirements. 00 $ 00 12.440,000 4.392,300 Requirements - X ing ther TI 8 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 (and possibly reallocating resources to other divisions) as a result of your analysis? If so, which division would you close and why? 9 9 Print Done 00
