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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 resort:

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?

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