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You are provided with the following information about a beachside restaurant complex that has 3 departments: The owner wants you to allocate the indirect costs
You are provided with the following information about a beachside restaurant complex that has 3 departments: The owner wants you to allocate the indirect costs to each department based on square footage. Dining Room 22,000 sq.ft. Tiki Bar 12,000 sq.ft. Lounge 6,000 sq.ft. A) Allocate the indirect costs using the requested method in the chart above. B) The owners of the restaurant complex have been offered $3, 500 a year by a local businessman willing to rent the lounge space and transform it into an arcade. The owner estimates that total indirect costs will decrease by $9, 850. In addition, dining room revenue will decrease by 10% resulting in a $12, 800 decrease in direct costs while tiki bar revenue will decrease by 20% resulting in a $10, 200 decrease in direct costs. Should the owners accept the offer to rent out the lounge space
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