Question
Q1. Spaghetti is a family-owned restaurant in KSA.The corporate office provides 2 kinds of services (maintenance and personnel) to 3 locations (Riyadh, Jeddah and Dammam).
Q1. Spaghetti is a family-owned restaurant in KSA.The corporate office provides 2 kinds of services (maintenance and personnel) to 3 locations (Riyadh, Jeddah and Dammam).
In a recent accounting period, the cost for maintenance was $25,000 and for personnel was $15,000.Maintenance costs are allocated on the basis of square feet, and personnel costs are allocated based on the basis of number of employees.
Number of
Square FeetEmployees
Support Departments:
Maintenance1,00015
Personnel1,0008
Operating Departments:
Riadh5,00012
Jeddah6,00018
Dammam3,00010
If the restaurant uses the direct method and the costs of Riadh location, Jeddah location and Dammam location are $15,000, $12,000 and $10,000 respectively, calculate the total costs allocated to each restaurant location.
Step by Step Solution
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Step: 1
Maintenance Cost Allocation Calculation of the total square footage across all locations 5000 Riyadh ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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