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please do it in a excel spreadsheet Problem 4: Explanation of ABC Costing The United Center is home to both the Chicago Blackhawks and the
please do it in a excel spreadsheet
Problem 4: Explanation of ABC Costing The United Center is home to both the Chicago Blackhawks and the Chicago Bulls in addition to hosting other special events (circus, Disney On Ice, etc). They are trying to determine the profitability of each type of activity (Bulls, Blackhawks, and Special Events). They have identified the following costs and want to use ABC to allocate these costs: Interest on Mortgage / Real Estate Taxes Salaries of Maintenance Personnel Set-Up Costs for Events (games and special events). Ticket Reservations / Ticket Sales $20,000,000 950,000 300,000 1,400,000 Here is other data related to the allocation of the indirect costs. Bulls Blackhawks 45 Special Events 30 Total Dates Total Tickets Sold Total Set-Up Hours 3000 Total Clean-Up Hours Average Ticket Price 45 900,000 800,000 6,000 1,800 450,000 7,500 1,000 1,200 $100 $105 $65 Write a memo to Mary Reinsdorf-Wirtz, CEO of the United Center. In the memo explain to her the concept of ABC and how the above costs should be allocated. Also, attach a partial income statement showing revenues, the indirect costs (all four) and net income for each type of event and the total. You will have to decide how to allocate the indirect costs however use ABC and show the allocation for all four indirect costs. The memo should be professionally typed and reviewed for errorsStep by Step Solution
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