Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Konig Enterprises, Limited, owns and operates three restaurants in Vancouver, B.C. The company allocates its fixed administrative expenses to the three restaurants on the basis

image text in transcribedimage text in transcribed
image text in transcribed
image text in transcribed
Konig Enterprises, Limited, 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. Last year the fixed administrative expenses totaled $990,000 and were allocated as follows: Restaurants Rick's Harborside Imperial Garden Ginger Mok Total Total sale-lant Your $ 21,500,000 $ 13,500,000 15,000,000 $50,000,000 Percentage of total salen 435 274 300 1000 Allocation based on the above percentagon $425,700 $ 267,300 $ 297,000 $ 990,000 This year the Imperial Garden restaurant increased its sales by $1 million. The sales levels in the other two restaurants remained unchanged. The company's sales data for this year were as follows: Iestaurant Rick Itachorside Imperial Gardeninger Wok Total salehe Year 21,500,000 0 14,500,000 $ 15,000,000 31,000,000 Percentage of total 428 Fixed administrative expenses for this year remained unchanged at $990,000 Required: 1. Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for this year. 2. Calculate the change in each restaurant's allocated cost from last year to this year. 3. Is sales dollars a good base for allocation of fixed costs? Total 295 200 1000 Complete this question by entering your answers in the tabs below. Reg 1 and 2 Req3 Req 1 and 2 Reg 3 1. Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for the year. 2. Calculate the change in each restaurant's allocated cost from last year to this year. (Negative amounts should be indicated by a minum sign.) Show less Imperial Harborside Garden Ginger Wok 1. Foed administrative expense allocation current year 2. Change in allocated cost Rick's Total Red 1 and 2 Req3 >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Financial Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

13th edition

1285868781, 978-1285868783

More Books

Students also viewed these Accounting questions

Question

What are the purposes of promotion ?

Answered: 1 week ago

Question

Name three risks for a company that introduces buy-side ecommerce.

Answered: 1 week ago