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
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 $960,000 and were allocated as follows: Total unles-Lant Year Percentage of total nalon Allocation based on the above percentagen) Rieks Harborside $19,780,000 438 5 412,800 Restaurants Imperial Garden $14,720,000 320 307,200 Ginger Wok $11,500,000 258 s 240,000 Total $46,000,000 2008 $ 960,000 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: Rieks Harborside $19,700.000 42 Restaurant Imperial Garden $15,720,000 144 Ginger bok $11,500,000 241 Total sales-This Year Percentage of total sales Total $47,500,000 1000 Fixed administrative expenses for this year remained unchanged at $960,000 Restaurants Imperial Garden $15,720,000 34 Rieks Harborside $19,780,000 425 Total sales-This Year Percentage of total salen Ginger Wok $11,500,000 244 Total $47.000.000 100 Fixed administrative expenses for this year remained unchanged at $960,000. Required: 1. Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for 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? this year. 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 Imperial Garden Ginger Wok Total 1. Fixed administrative expense allocation current year 2. Change in allocated cost $ 0 0 $ Req3 >

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

Step: 3

blur-text-image

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

Strategic Market Management

Authors: David A. Aaker

5th Edition

0471177431, 9780471177432

More Books

Students also viewed these Accounting questions

Question

Define human resource management.

Answered: 1 week ago