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. During 2013, the fixed administrative expenses totaled $990,000. These expenses were allocated as follows:

	Restaurants
		Ricks Harborside				Imperial Garden				Ginger Wok				Total
Total sales2013	$	16,400,000			$	11,600,000			$	12,000,000			$	40,000,000
Percentage of total sales		41	%			29	%			30	%			100	%
Allocation (based on the above percentages)	$	405,900			$	287,100			$	297,000			$	990,000

During 2014, the following year, the Imperial Garden restaurant increased its sales by $10 million. The sales levels in the other two restaurants remained unchanged. The companys 2014 sales data were as follows:

	Restaurants
		Ricks Harborside				Imperial Garden				Ginger Wok				Total
Total sales2014	$	17,000,000			$	23,500,000			$	9,500,000			$	50,000,000
Percentage of total sales		34	%			47	%			19	%			100	%

Fixed administrative expenses remained unchanged at $990,000 during 2014.

Required:

1.

Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for 2014.

	Restaurants
Ricks Harborside
Imperial Garden
Ginger Wok
Total	$0

2.

Compare your allocation from (1) above to the allocation for 2013 and determine the increase or decrease in allocation? (Decreases should be indicated by a minus sign.)

	Restaurants
Ricks Harborside
Imperial Garden
Ginger Wok
Total	$0

Tasman Products, Ltd., of Australia has a Maintenance Department that services the equipment in the companys Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments on the basis of machine-hours. Cost and other data relating to the Maintenance Department and to the other two departments for the most recent year are presented below.

Data for the Maintenance Department follow:

	Budget			Actual
Variable costs for lubricants	$	380,000	*	$	488,000
Fixed costs for salaries and other	$	181,000		$	194,100

*Budgeted at $25 per machine-hour.

Data for the Forming and Assembly departments follow:

	Percentage of Peak-Period Capacity Required	Machine-Hours
		Budget	Actual
Forming Department	60%	9,800	11,800
Assembly Department	40%	5,400	4,400
Total	100%	15,200	16,200

The level of fixed costs in the Maintenance Department is determined by peak-period requirements.

Required:

Management would like data to assist in comparing actual performance to planned performance in the Maintenance Department and in the other departments.

1.

How much Maintenance Department cost should be charged to the Forming Department and to the Assembly Department?

	Forming Department	Assembly Department	Total
Variable costs			0
Fixed costs			0
Total cost charged	0	0	0

2.

Compute the amount of the actual Maintenance Department costs that should not be charged to the other departments?

	Variable Cost	Fixed Cost	Total
Cost not charged (spending variance)			0