Question
In: Accounting
Pacific Hotels operates a centralized call center for the reservation needs of its hotels. Costs associated...
Pacific Hotels operates a centralized call center for the reservation needs of its hotels. Costs associated with use of the center are charged to the hotel group (luxury, resort, standard, and budget) based on the length of time of calls made (time usage). Idle time of the reservation agents, time spent on calls in which no reservation is made, and the fixed cost of the equipment are allocated based on the number of reservations made in each group. Due to recent increased competition in the hotel industry, the company has decided that it is necessary to better allocate its costs in order to price its services competitively and profitably. During the most recent period for which data are available, the use of the call center for each hotel group was as follows:
| Division | Time Usage(thousands of minutes) | Number of Reservations (thousands) | ||||
| Luxury | 200 | 104 | ||||
| Resort | 100 | 143 | ||||
| Standard | 400 | 286 | ||||
| Budget | 300 | 767 | ||||
During this period, the cost of the call center amounted to $890,000 for personnel and $630,000 for equipment and other costs.
Required:
a. Determine the allocation to each of the divisions using the following:
1. A single rate based on time used. (Do not round intermediate calculations.)
2. Dual rates based on time used (for personnel costs) and number of reservations (for equipment and other cost). (
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Pacific Hotels operates a centralized call center for the reservation needs of its hotels. Costs associated...
Pacific Hotels operates a centralized call center for the
reservation needs of its hotels. Costs associated with use of the
center are charged to the hotel group (luxury, resort, standard,
and budget) based on the length of time of calls made (time usage).
Idle time of the reservation agents, time spent on calls in which
no reservation is made, and the fixed cost of the equipment are
allocated based on the number of reservations made in each group.
Due to...
Pacific Hotels operates a centralized call center for the reservation needs of its hotels. Costs associated...
Pacific Hotels
operates a centralized call center for the reservation needs of its
hotels. Costs associated with use of the center are charged to the
hotel group (luxury, resort, standard, and budget) based on the
length of time of calls made (time usage). Idle time of the
reservation agents, time spent on calls in which no reservation is
made, and the fixed cost of the equipment are allocated based on
the number of reservations made in each group. Due to...
Pacific Hotels operates a centralized call center for the reservation needs of its hotels. Costs associated...
Pacific Hotels operates a centralized call center for the
reservation needs of its hotels. Costs associated with use of the
center are charged to the hotel group (luxury, resort, standard,
and budget) based on the length of time of calls made (time usage).
Idle time of the reservation agents, time spent on calls in which
no reservation is made, and the fixed cost of the equipment are
allocated based on the number of reservations made in each group.
Due to...
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An airline operates a call center to handle customer questions and complaints. the airline monitors a...
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ensure that the service being offered is of high quality. The
random samples of 100 calls each were monitored under normal
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A business owner needs a loan to cover the first year of fixed costs associated with...
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Calls Taken
Call Center Cost
April
7560
$
81,960
May
7529
$
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June
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$
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July
7568
$
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August
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September
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October
7592
$
82,156
November
7579
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Management believes that the cost of the call center is a mixed
cost that...
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