The Aday Lodge has recorded the following information for the period ended December 31st: DEPARTMENTS ROOMS F&B
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Question:
The Aday Lodge has recorded the following information for the period ended December 31st:
DEPARTMENTS | ||||
ROOMS | F&B | RETAIL | TOTAL | |
Sales | $2,800,000 | $1,550,000 | $650,000 | $5,000,000 |
Direct Expenses | $1,100,000 | $850,000 | $300,000 | $2,250,000 |
Gross Profit | $1,700,000 | $700,000 | $350,000 | $2,750,000 |
The Aday Lodge management has decided to distribute the indirect expenses to each department using the criteria below:
Indirect Expenses | |
Administrative | $ 520,000 |
Maintenance | $ 30,000 |
Property Taxes | $ 80,000 |
Insurance | $ 40,000 |
Marketing | $ 80,000 |
Utilities | $ 240,000 |
The 'Administrative' and the 'Marketing' expenses are to be distributed based on their sales mix.
The 'Insurance', 'Utilities', and 'Property Taxes' are to be distributed based on the square footage occupied by each department. The data is as follows:
Department | Square Footage |
Rooms | 80,000 |
F&B | 15,000 |
Retail | 5,000 |
The 'Maintenance Expense' is to be distributed equally amongst the departments.
With this information, solve the following:
Administrative expense for the rooms department
Related Book For
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st Edition
Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young
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