Manama Enterprises, Ltd., owns and operates three shopping malls in Bahrain. The company allocates its fixed administrative expenses to the three Shopping Malls on the basis of sales dollars. Last year the fixed administrative expenses totaled 1,000,000 and were allocated as follows:

Shopping Malls

Particular

Riffa

Jufair

Issa town

Total

SH-1

SH-2

SH-3

Total salesLast Year

$12,000,000

$9,000,000

$7,000,000

$28,000,000

Percentage of total sales

43%

32.14%

25.00%

100%

Allocation (based on the above percentages)

$428,571

$321,429

$250,000

$1,000,000

This year the Jufair SH-2 increased its sales by eight million. The sales levels in the other two restaurants remained unchanged.

Required:

Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three shopping malls for this year.

Calculate the change in each Shopping malls allocated cost from last year to this year. As the manager of the Jufair, how would you feel about the amount that has been charged to you for this year?

Comment on the usefulness of sales dollars as an allocation base.

QUESTION 6 5 points Manama Enterprises, Ltdowns and operates three shopping masin Bahrain. The company lochtesis food administrative expenses to the three Shopping Malls on the basis of sales dollars. Last you the fied adstrative expenses totaled 1,000,000 and wore allocated as follows Shopping Malls Riffa Jutair Issa town Particular SH.1 SH-2 SH-3 Total Total salesLast Year $12.000.000 $9,000,000 57,000,000 528,000,000 Percentage of total sales 4396 32 149 25 100 Allocation (based on the above $420 571 percentages) $321.429 $250 000 $1.000.000 This year the Juta SH-2 increased its sales by eight million The saksbevel the other two restaurants romaned unchanged Required: 1 Using sales dollars as an allocation base, show the location of the beastrative expenses among the shopping malls for this year 2. Calculate the change in each Shopping malls allocated cost from last year to this year. As the manager of the fair how would you for about the mount that has been charge to you for this year? 3 Cominent on the usefulness of sales dollars as an alocation base Sve and