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Please answer the required 3 Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts are named after the
Please answer the required 3
Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts are named after the predominant trees at the resort: Pine Valley, Oak Glen, Mimosa, and Birch Glen. Woodland allocates its central office costs to each of the four resorts according to the annual revenue the resort generates. For the current year, the central office costs (000s omitted) were as follows: Front office personnel (desk, clerks, etc.) Administrative and executive salaries Interest on resort purchase Advertising Housekeeping Depreciation on reservations computer Room maintenance Carpet-cleaning contract Contract to repaint rooms $ 8,400 4, 200 3, 200 600 2, 200 80 840 50 420 $ 19,990 Revenue (000s) Square feet Pine Valley $ 5, 750 56, 510 86 $ 94, 070 Oak Glen $ 8,595 78, 035 122 $ 139, 310 Mimosa $ 9, 520 42, 565 66 $ 73, 725 Birch Glen $ 7,040 85, 260 174 $ 58, 595 Total $ 30,905 262, 370 448 $365, 700 Rooms Assets (000s) Required: 1. Based on annual revenue, what amount of the central office costs are allocated each resort? 2. Suppose that the current methods were replaced with a system of four separate cost pools with costs collected in the four pools allocated on the basis of revenues, assets invested in each resort, square footage, and number of rooms, respectively. Which costs should be collected in each of the four pools? 3. Using the cost pool system in requirement 2, how much of the central office costs would be allocated to each resort? Required 1 Required 2 Required 3 Suppose that the current methods were replaced with a system of four separate cost pools with costs collected in the four pools allocated on the basis of revenues, assets invested in each resort, square footage, and number of rooms, respectively. Which costs should be collected in each of the four pools? (Enter your answers in thousands of dollars.) Allocation Base Total Revenue $ 4,880 Square feet $ 470 Number of rooms $ 11,440 3,200 Assets $ Required 1 Required 2 Required 3 Using the cost pool system in requirement 2, how much of the central office costs would be allocated to each resort? (Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest dollar.) Allocation Base Pine Valley Oak Glen Mimosa Birch Glen Total Revenue $ 920 X $ 1,375 X $ 1,523 X $ 1,126 x $ 4,944 113 X 156 x 85 X 170 X 524 Square feet Number of rooms Assets 2,196 4,442 x 847 X 3,115 1,254 X 5,900 1,685 664 3,957 527 X 11,438 3,292 20,198 Total cost allocated $ 4,076 $ $ $ 6,265 $Step by Step Solution
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