Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Konig Enterprises, Ltd., owns and operates three restaurants in Vancouver, B.C. The company allocates its fixed administrative expenses to the three restaurants on the basis

image text in transcribed
image text in transcribed
Konig Enterprises, Ltd., owns and operates three restaurants in Vancouver, B.C. The company allocates its fixed administrative expenses to the three restaurants on the basis of sales dollars. Last year the fixed administrative expenses totaled $810,000 and were allocated as follows: Restaurants Imperial Garden $11,880,000 27 $ 218,700 Rick's Harborside $18,920,000 439 348,300 Total sales-Last Year Percentage of total sales Allocation based on the above percentages) Ginger Wok $13,200,000 30 $ 243,000 Total $44,000,000 100% $ 810,000 This year the Imperial Garden restaurant increased its sales by $1 million. The sales levels in the other two restaurants remained unchanged. The company's sales data for this year were as follows: Restaurants Imperial Garden $12,880,000 29 Rick's Harborside $18,920,000 42 Total sales-This Year Percentage of total sales Ginger Wok $13,200,000 299 Total $45,000,000 1005 Fixed administrative expenses for this year remained unchanged at $810,000. Required: 1. Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for this year 2. Calculate the change in each restaurant's allocated cost from last year to this year. 3. Is sales dollars a good base for allocation of fixed costs? Complete this question by entering your answers in the tabs below. Reg 1 and 2 Reg 3 1. Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for this year 2. Calculate the change in each restaurant's allocated cost from last year to this year. (Negative amounts should be indicated by a minus sign Show less Rick's Harborside Total Imperial Garden Ginger Wok 1. Fuad administrative expense allocation. Current year 2 Change in allocated cost Ree 3 >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting An International Introduction

Authors: David Alexander

7th Edition

129229583X, 978-1292295831

More Books

Students also viewed these Accounting questions

Question

=+c. Savings as the Star focus on price.

Answered: 1 week ago

Question

=+b. Product-Focused emphasize product features.

Answered: 1 week ago