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.

Front office personnel	10900
Administrative and executive salaries	5300
Interest on resort purchase	4300
Advertising	600
Housekeeping	3,300
Depreciation on reservations computer	80
Room maintenance	1,090
Carpet-cleaning contract	50
Contract to repaint rooms	530
	$26,150

Pine Valley

Oak Glen

Mimosa

Birch Glen

Total

Revenue (000s)

8350

12480

13825

10,225

44,880

Square feet

62215

85890

46835

93,820

288,760

Rooms

86

122

66

174

448

Assets (000s)

103565

153335

81120

$

64,480

402,500

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?