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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
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 2008, the fixed administrative expenses totaled $940,000. These expenses were allocated as follows Restaurants Ginger Wok $1,408,000 $4,224,000 $6,400,000 66% $ 206,800 620,400 940,000 Ricks's Harborside Imperial Garden Total Total sales-2008 Percentage of total sales Allocation(based on the above percentages) $768,000 12% 22% 100% $112,800 During 2009, the following year, the Imperial Garden restaurant increased its sales by $1 million. The sales levels in the other two restaurants remained unchanged. The company's 2009 sales data were as follows Restaurants Ginger Wok $4,919,040 62% Total $7,808,000 100% Ricks's HarborsideImperial Garden $2,342,400 Total sales-2009 Percentage of total sales $546,560 7% 30% Fixed administrative expenses remained unchanged at $940,000 during 2009
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