Question
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. For the current year, the central office costs (000s omitted) were as follows: Front office personnel (desk, clerks, etc.) $ 8,200 Administrative and executive salaries 4,200 Interest on resort purchase 3,200 Advertising 700 Housekeeping 2,200 Depreciation on reservations computer 180 Room maintenance 820 Carpet-cleaning contract 54 Contract to repaint rooms 420 Costs to be allocated $ 19,974 Pine Valley Oak Glen Mimosa Birch Glen Total Revenue (000s) $ 5,550 $ 8,195 $ 8,877 $ 6,950 $ 29,572 Square feet 55,675 76,799 41,974 83,864 258,312 Rooms 88 124 68 176 456 Assets (000s) $ 92,545 $ 136,945 $ 72,555 $ 57,699 $ 359,744 Suppose that the current method 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.)
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