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: 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.)	$	10,000
Administrative and executive salaries		5,000
Interest on resort purchase		4,000
Advertising		600
Housekeeping		3,000
Depreciation on reservations computer		80
Room maintenance		1,000
Carpet-cleaning contract		50
Contract to repaint rooms		500
	$	24,230

	Pine Valley		Oak Glen		Mimosa		Birch Glen		Total
Revenue (000s)	$	7,750	$	11,580	$	12,830	$	9,490	$	41,650
Square feet		60,660		83,735		45,655		91,455		281,505
Rooms		86		122		66		174		448
Assets (000s)	$	100,975	$	149,485	$	79,080	$	62,855	$	392,395

Please answer the following questions:

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?

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Woodland Hotels Inc.
Answer 1	Pine Valley	Oak Glen	Mimosa	Birch Glen	Total	Note
Revenue	7,750.00	11,580.00	12,830.00	9,490.00	41,650.00	A
Revenue %	18.61%	27.80%	30.80%	22.79%	100.00%	B=A/Sum of A
Allocation of central office costs	4,508,583.43	6,736,696.28	7,463,887.15	5,520,833.13	24,230,000.00	C= $ 24,230,000* B

Answer 2
Calculation of ABC rates for overhead		D	E	F=D/E
Activity cost pool	Cost Driver	Cost	Quantity	ABC rates
Front office personnel (desk, clerks, etc.)	Rooms	10,000,000.00	448.00	22,321.43
Administrative and executive salaries	Revenue (000s)	5,000,000.00	41,650.00	120.05
Interest on resort purchase	Assets (000s)	4,000,000.00	392,395.00	10.19
Advertising	Revenue (000s)	600,000.00	41,650.00	14.41
Housekeeping	Rooms	3,000,000.00	448.00	6,696.43
Depreciation on reservations computer	Assets (000s)	80,000.00	392,395.00	0.20
Room maintenance	Rooms	1,000,000.00	448.00	2,232.14
Carpet-cleaning contract	Square feet	50,000.00	281,505.00	0.18
Contract to repaint rooms	Square feet	500,000.00	281,505.00	1.78
Total Cost		24,230,000.00

Answer 3		See E	G	H=G*E	I	J=I*E	K	L=K*E	M	N=M*E
Allocation table			Pine Valley	Oak Glen	Mimosa	Birch Glen
Activity cost pool	Cost Driver	ABC Rates	Activity used	Cost assigned	Activity used	Cost assigned	Activity used	Cost assigned	Activity used	Cost assigned
Front office personnel (desk, clerks, etc.)	Rooms	22,321.43	86.00	1,919,642.86	122.00	2,723,214.29	66.00	1,473,214.29	174.00	3,883,928.57
Administrative and executive salaries	Revenue (000s)	120.05	7,750.00	930,372.15	11,580.00	1,390,156.06	12,830.00	1,540,216.09	9,490.00	1,139,255.70
Interest on resort purchase	Assets (000s)	10.19	100,975.00	1,029,319.95	149,485.00	1,523,821.66	79,080.00	806,126.48	62,855.00	640,731.92
Advertising	Revenue (000s)	14.41	7,750.00	111,644.66	11,580.00	166,818.73	12,830.00	184,825.93	9,490.00	136,710.68
Housekeeping	Rooms	6,696.43	86.00	575,892.86	122.00	816,964.29	66.00	441,964.29	174.00	1,165,178.57
Depreciation on reservations computer	Assets (000s)	0.20	100,975.00	20,586.40	149,485.00	30,476.43	79,080.00	16,122.53	62,855.00	12,814.64
Room maintenance	Rooms	2,232.14	86.00	191,964.29	122.00	272,321.43	66.00	147,321.43	174.00	388,392.86
Carpet-cleaning contract	Square feet	0.18	60,660.00	10,774.23	83,735.00	14,872.74	45,655.00	8,109.09	91,455.00	16,243.94
Contract to repaint rooms	Square feet	1.78	60,660.00	107,742.31	83,735.00	148,727.38	45,655.00	81,090.92	91,455.00	162,439.39
Total Cost assigned				4,897,939.70		7,087,373.00		4,698,991.04	ekkarill92 Next > < Previous Related Solutions Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts... 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.) $ 10,000 Administrative and executive salaries 5,000 Interest... Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts... 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.) $ 10,900 Administrative and executive salaries 5,300 Interest... Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts... 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.) $ 9,000 Administrative and executive salaries 4,500 Interest... Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts... 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.) $ 8,800 Administrative and executive salaries 4,400 Interest... Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts... 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.) $ 13,000 Administrative and executive salaries 6,000 Interest... Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts... 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.) $ 9,800 Administrative and executive salaries 4,900 Interest... Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts... 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.) $ 11,500 Administrative and executive salaries 5,500 Interest... Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts... 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... IceCap Hotels operates a series of northern European hotels and reports under IFRS. On June 30,... IceCap Hotels operates a series of northern European hotels and reports under IFRS. On June 30, 2016, IceCap purchased land for €3,000,000. IceCap reports land values on the balance sheet under Property, plant, and equipment. The appraisal value for the land (which you can assume is the same as the recoverable amount) was reported as: Appraisal Date Land Value 12/31/2016 € 3,150,000 12/31/2017 € 2,750,000 12/31/2018 € 2,850,000 Required: Prepare the journal entries at the end of 2016, 2017, and... Nature of Uncollectible Accounts MGM Resorts International owns and operates hotels and casinos including the MGM... Nature of Uncollectible Accounts MGM Resorts International owns and operates hotels and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, MGM reported accounts receivable of $592,937,000 and allowance for doubtful accounts of $101,207,000 Johnson & Johnson manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, Johnson & Johnson reported accounts receivable of $11,775,000,000 and allowance for doubtful accounts of $466,000,000. a. Compute... ADVERTISEMENT Subjects Accounting Advanced Math Anatomy and Physiology Biology Chemistry Civil Engineering Computer Science Economics Electrical Engineering Finance History Math Mechanical Engineering Operations Management Physics Psychology Statistics and Probability Nursing Other ADVERTISEMENT Latest Questions For Questions 1-3: consider the following code: public class A { private int number; protected String... You are tasked with assessing the health department’s intervention program in preventing recurrence of acute alcohol... Compare the MOSFET, JFET , and BJT and identify the reasons these devices behave differently. What... How would you use SAS Enterprise Miner to create a neural network model of your example? Explain the use of neural networking modeling in predictive analytics. Current Market Mix of Netflix, as detail as possible, please. This is all one question, thank you so much in advance! You must evaluate a proposal... ADVERTISEMENT About @ 2020 WizEdu