Konig Enterprises, Ltd., owns and operates three restaurants in Vancouver, BC The company allocates its fixed administrative expenses to the three restaurants on the basis of sales dollars. Last year the fixed administrative expenses totaled 5900,000 and were allocated as follows: Total sales-Last Year Percentage of total sales Allocation based on the above percentages) Rick's Harboeside $17,640,000 42% $ 378,000 Restaurants Imperial Garden 59,660,000 23 5 207.000 Ginger Wok $14,700,000 35% $ 315,000 Total 542,000,000 100% $ 900.000 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 $10,660,000 25% Ricks Harborside $17,640,000 41% Total sales-This Year Percentage of total sales Ginger Mok $14,700,000 34% Total $43,000,000 100% Fixed administrative expenses for this year remained unchanged at $900.000 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. Req 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.) Pic Imperial 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 $10,660,000 25% Rick's Harborside $17,640,000 413 Total sales-This Year Percentage of total sales Ginger Wok $14,700.000 34K Total $43,000,000 100% Fixed administrative expenses for this year remained unchanged at $900,000 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 Req3 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) Rick's Imperial Harborside Garden Ginger Wok 1 Fixed administrative expense allocation - current year 2. Change in allocated cost Total Reg 1 and Req3 >
