The Red Carpet is developing a cost accounting system. Initially the hotel decided to create four...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Red Carpet is developing a cost accounting system. Initially the hotel decided to create four cost centres: Residential and Catering deal directly with customers while Housekeeping and Maintenance are intemal service cost centres. RM RM Consumable materials - Residential - Catering - House-keeping - Maintenance 14,000 23,000 27,000 9,000 73,000 Staff costs - Residential - Catering - House-keeping - Maintenance 16,500 13,000 11,500 5,500 46.500 Rent and rates 37,500 Hotel contents insurance Heating and lighting Depreciation on equipment etc TOTAL 14,000 18,500 37.500 227.000 Depreciation on equipment etc ТОTAL 37,500 227,000 The following particulars are available: Particulars Residential Catering 1,350 Area occupied (sq. metres) Number of personnel Book value of equipment House-keeping Maintenance 600 15 RM75,000 2,750 300 5 20 20 RM 350,000 RM250,000 RM75,000 Red Carpet estimated that there will be 2,800 guest-nights and 16,000 meals will be served. Housekeeping works 70% for Residential and 30% for Catering; and Maintenance works 20% for Housekeeping, 30% for Catering and 50% for Residential. Required: (a) Prepare an overhead statement showing clearly allocations and apportionments to each cost centre. (10 marks) (b) Calculate appropriate overhead absorption rates for Residential and Catering, (2 marks) (e) Discuss TWO (2) unfavourable impacts that may arise if Red Carpet uses inappropriate bases in apportioning its overhead to the departments. (5 marks) (d) Discuss TWO (2) importance of overhead allocation for Red Carpet. Please remember to relate your answers to the business nature of the hotel. The Red Carpet is developing a cost accounting system. Initially the hotel decided to create four cost centres: Residential and Catering deal directly with customers while Housekeeping and Maintenance are intemal service cost centres. RM RM Consumable materials - Residential - Catering - House-keeping - Maintenance 14,000 23,000 27,000 9,000 73,000 Staff costs - Residential - Catering - House-keeping - Maintenance 16,500 13,000 11,500 5,500 46.500 Rent and rates 37,500 Hotel contents insurance Heating and lighting Depreciation on equipment etc TOTAL 14,000 18,500 37.500 227.000 Depreciation on equipment etc ТОTAL 37,500 227,000 The following particulars are available: Particulars Residential Catering 1,350 Area occupied (sq. metres) Number of personnel Book value of equipment House-keeping Maintenance 600 15 RM75,000 2,750 300 5 20 20 RM 350,000 RM250,000 RM75,000 Red Carpet estimated that there will be 2,800 guest-nights and 16,000 meals will be served. Housekeeping works 70% for Residential and 30% for Catering; and Maintenance works 20% for Housekeeping, 30% for Catering and 50% for Residential. Required: (a) Prepare an overhead statement showing clearly allocations and apportionments to each cost centre. (10 marks) (b) Calculate appropriate overhead absorption rates for Residential and Catering, (2 marks) (e) Discuss TWO (2) unfavourable impacts that may arise if Red Carpet uses inappropriate bases in apportioning its overhead to the departments. (5 marks) (d) Discuss TWO (2) importance of overhead allocation for Red Carpet. Please remember to relate your answers to the business nature of the hotel. The Red Carpet is developing a cost accounting system. Initially the hotel decided to create four cost centres: Residential and Catering deal directly with customers while Housekeeping and Maintenance are intemal service cost centres. RM RM Consumable materials - Residential - Catering - House-keeping - Maintenance 14,000 23,000 27,000 9,000 73,000 Staff costs - Residential - Catering - House-keeping - Maintenance 16,500 13,000 11,500 5,500 46.500 Rent and rates 37,500 Hotel contents insurance Heating and lighting Depreciation on equipment etc TOTAL 14,000 18,500 37.500 227.000 Depreciation on equipment etc ТОTAL 37,500 227,000 The following particulars are available: Particulars Residential Catering 1,350 Area occupied (sq. metres) Number of personnel Book value of equipment House-keeping Maintenance 600 15 RM75,000 2,750 300 5 20 20 RM 350,000 RM250,000 RM75,000 Red Carpet estimated that there will be 2,800 guest-nights and 16,000 meals will be served. Housekeeping works 70% for Residential and 30% for Catering; and Maintenance works 20% for Housekeeping, 30% for Catering and 50% for Residential. Required: (a) Prepare an overhead statement showing clearly allocations and apportionments to each cost centre. (10 marks) (b) Calculate appropriate overhead absorption rates for Residential and Catering, (2 marks) (e) Discuss TWO (2) unfavourable impacts that may arise if Red Carpet uses inappropriate bases in apportioning its overhead to the departments. (5 marks) (d) Discuss TWO (2) importance of overhead allocation for Red Carpet. Please remember to relate your answers to the business nature of the hotel. The Red Carpet is developing a cost accounting system. Initially the hotel decided to create four cost centres: Residential and Catering deal directly with customers while Housekeeping and Maintenance are intemal service cost centres. RM RM Consumable materials - Residential - Catering - House-keeping - Maintenance 14,000 23,000 27,000 9,000 73,000 Staff costs - Residential - Catering - House-keeping - Maintenance 16,500 13,000 11,500 5,500 46.500 Rent and rates 37,500 Hotel contents insurance Heating and lighting Depreciation on equipment etc TOTAL 14,000 18,500 37.500 227.000 Depreciation on equipment etc ТОTAL 37,500 227,000 The following particulars are available: Particulars Residential Catering 1,350 Area occupied (sq. metres) Number of personnel Book value of equipment House-keeping Maintenance 600 15 RM75,000 2,750 300 5 20 20 RM 350,000 RM250,000 RM75,000 Red Carpet estimated that there will be 2,800 guest-nights and 16,000 meals will be served. Housekeeping works 70% for Residential and 30% for Catering; and Maintenance works 20% for Housekeeping, 30% for Catering and 50% for Residential. Required: (a) Prepare an overhead statement showing clearly allocations and apportionments to each cost centre. (10 marks) (b) Calculate appropriate overhead absorption rates for Residential and Catering, (2 marks) (e) Discuss TWO (2) unfavourable impacts that may arise if Red Carpet uses inappropriate bases in apportioning its overhead to the departments. (5 marks) (d) Discuss TWO (2) importance of overhead allocation for Red Carpet. Please remember to relate your answers to the business nature of the hotel.
Expert Answer:
Answer rating: 100% (QA)
a Statement showing distribution of Overheads Particulars Basis Total Direct Cost centres Service Co... View the full answer
Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
Posted Date:
Students also viewed these accounting questions
-
Assume a system defined by the state : 0 * = []x+u -5 y = [1 0]x Design state feedback controller such that the system has 5% overshoot and 0.5 sec settling time
-
The GH company uses a cost accounting system by process and presents the following information for the month of July 2017: Its products are electronic components, manufactured in series for which its...
-
An analyst has estimated that there will be an 84% learning curve for an assembly operation. The first assembly takes 48 minutes and the standard time is set at 6 minutes. a. How long will it take...
-
Determine the global extreme values of the function on the given domain. f(x, y) = 5x- 3y, y x-2, yz-x-2, y 3
-
What are some characteristics of individuals with an antisocial or dissocial personality disorder?
-
A cosmic-ray proton approaches Earth vertically at the equator, where the horizontal component of Earths magnetic field is 3.5 x 10 - 5 T. If the proton is moving at 3.0 x10 6 m/s, what is the ratio...
-
Find the positive z-score for which 15% of the distributions area lies between -z and z. Find the indicated z-score.
-
Fiera co Is evaluating a new project that cost $45,000 Financed using 40% debt & 60% equity. The firms stockholders required rate of return of 18.36% and its bondholders expect 10.86% ror. The...
-
How does Total Productive Maintenance align with broader asset management strategies, such as ISO 55000, to create a holistic approach to equipment reliability and maintenance? Discuss the...
-
Julio and Milania are owners of Falcons Corporation, an S corporation. They each own 50 percent of Falcons Corporation. In year 1, Julio and Milani received distributions of $20,000 and $10,000,...
-
JuicyFruits Sdn. Bhd. involves in processing and packaging fruits at Bandar Segar. The operating costs incurred including fruits grading and packaging costs. The following are data on the operating...
-
Department A is required to transfer 50% of its output to Department B at cost. Department B adds value to the product and then sells to outside customers. Manager A complains that the performance of...
-
Define, and explain the use of, return on investment as a measure of divisional performance.
-
How does target costing help maintain competitive advantage.
-
Dallas (UK) Ltd is a wholly owned subsidiary of a US parent and has been set up as a new manufacturing facility in the UK. The projected capital costs and sources of funds are as follows: Costs...
-
Define current liabilities and give three examples.
-
An animal - rescue plane flying due east at 3 3 3 3 m / / s drops a bale of hay from an altitude of 5 5 5 5 m . . The acceleration due to gravity is 9 . 8 1 9 . 8 1 m / / s 2 . ^ 2 . If the bale of...
-
Complete the following acid-base reactions: (a) HCCH + NaH
-
Sara Pacheco is a sophomore in college and earns a little extra money by making beaded key ring accessories. She sells them on Saturday mornings at the local flea market. Sara charges $5 per unit and...
-
Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On...
-
A company that produces 10,000 units has fixed costs of $300,000, variable costs of $50 per unit, and a sales price of $85 per unit. After learning that its variable costs will increase by 20...
-
Thor Industries manufactures Airstream and other recreational vehicles (RVs). In In June 2023, an article in the Wall Street Journal stated that the inventories of RVs held by Thor dealers had risen...
-
An article in the New York Times in early 2009 stated that even though The the U.S. economy was in a recession, and movie ticket sales had increased by 17.5 percent. In contrast, during 2020, ticket...
-
An article on barrons.com observed that the U.S. dollar has been droppingand thats good news for the stock market and companies that get a large chunk of their sales from overseas. a. What does the...
Study smarter with the SolutionInn App