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Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts are named after the predominant trees at the
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 $ 9,800 4,900 3,900 600 2,900 80 980 50 490 $23,700 Pine Valley Birch Glen Oak Glen Revenue (000s) $ 7,550 $ 11,285 Square feet Rooms 60,140 86 Assets (000s) $100,110 83,020 122 $148,205 Mimosa $ 12,500 45,280 $ 9,245 $ 40,580 Total 66 90,690 174 279,130 448 $ 78,425 $ 62,325 $389,065 Required: 1. Based on annual revenue, what amount of the central office costs are allocated to 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Based on annual revenue, what amount of the central office costs are allocated to each resort? (Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest dollar.) Allocated cost Pine Valley Oak Glen Mimosa Birch Glen Total $ Required 1 Required 2 > Complete this question by entering your answers in the tabs below. 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 Revenue Square feet Number of rooms Assets Total Complete this question by entering your answers in the tabs below. 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 Revenue Square feet Pine Valley Oak Glen Mimosa Birch Glen Total $ 0 0 Number of rooms 0 Assets 0 Total cost allocated $ 0 $ 0 $ 0 $ 0 $ 0
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