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Lenoir Hotel operated 3 departments and during last period, the sales and direct expenses were recorded as Room 80,000 30,000 50,000 F&B $40,000 S20,000 20,000
Lenoir Hotel operated 3 departments and during last period, the sales and direct expenses were recorded as Room 80,000 30,000 50,000 F&B $40,000 S20,000 20,000 Retail 20,000 $6,000 $14,000 TOTAL $140,000 56,000 84,000 SALES DIRECT EXPENSES DEPARTMENTAL INCOME The company also incurred the following indirect expenses: Administrative and General Insurance Expense $ 6,000 $12,000 4,000 8,000 Property Taxes The management of Lenoir Hotel has decided to distribute the above indirect expenses to the 3 departments using the below criteria: a. "Administrative and General" and "Promotion and Marketing are to be distributed base on sales mix. b. The Property Taxes Expenses are to be distributed based on the square footage occupied by each department as follows: Room 20,000 sq ft F&B 5,000 sq ft Retail2,000 sq ft The Insurance Expenses are to be distributed equally among 3 departments. c. Room F&B Retail Total Departmental Net Income $50,000 S84,000 $20,000 $14,000 General Promotion and Property Tax Insurance Expense Total Indirect Net Profit
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