You have the following annual information about a restaurant complex consisting of three departments: Contributory Income...

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You have the following annual information about a restaurant complex consisting of three departments: Contributory Income Statement Coffee Shop Dining Room Lounge Total Sales revenue $194,800 $135,800 $152,800 $483,400 ( 154,400) ( 128,000) (124.600) (407,000) $ 76,400 ( 52,000) $ 24,400 Direct costs $ 7.800 $ 28,200 Contributory income $ 40,400 Indirect costs Operating income The owner wants to allocate indirect costs quarterly to each department based on square footage to get a better picture of how each department is doing. Dining room Coffee shop Lounge 2,200 sq. ft. 840 sq. ft. 960 sq. ft. a. Allocate the indirect costs as indicated. b. The owner has an offer from the souvenir store operator who is will- ing to rent the coffee shop space for $9,600 a year. Advise the owner whether to accept the offer. You have the following annual information about a restaurant complex consisting of three departments: Contributory Income Statement Coffee Shop Dining Room Lounge Total Sales revenue $194,800 $135,800 $152,800 $483,400 ( 154,400) ( 128,000) (124.600) (407,000) $ 76,400 ( 52,000) $ 24,400 Direct costs $ 7.800 $ 28,200 Contributory income $ 40,400 Indirect costs Operating income The owner wants to allocate indirect costs quarterly to each department based on square footage to get a better picture of how each department is doing. Dining room Coffee shop Lounge 2,200 sq. ft. 840 sq. ft. 960 sq. ft. a. Allocate the indirect costs as indicated. b. The owner has an offer from the souvenir store operator who is will- ing to rent the coffee shop space for $9,600 a year. Advise the owner whether to accept the offer.

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