Week 2 Template

Week 2 Template - Week 2 Template 14-18 (30 min.) Cost...

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Unformatted text preview: Week 2 Template 14-18 (30 min.) Cost allocation to divisions. 1. Hotel Restaurant Casino Rembrandt Revenue Direct costs Segment margin Fixed overhead costs Income before taxes Segment margin % 2. Hotel Restaurant Casino Rembrandt Direct costs Direct cost % Square footage Square footage % Number of employees Number of employees % A: Cost allocation based on direct costs: Hotel Restaurant Casino Rembrandt Revenue Direct costs Segment margin Allocated fixed overhead costs Segment pre-tax income Segment pre-tax income % of rev. B: Cost allocatio n based on floor space: Hotel Restaurant Casino Rembrandt Allocated fixed overhead costs Segment pre-tax income Segment pre- tax income % of rev. C: Cost allocati on based on numbe r of employ ees Hotel Restaurant Casino Rembrandt Allocated fixed overhead costs Segment pre- tax income Segment pre- tax income % of rev. 3. Requirement 2 shows the dramatic effect of the choice of cost allocation base on segment pre-tax income as a percentage of revenues: Pre-tax Income Percentage Allocation Base Hotel Restaurant Casino Direct costs Floor space Number of employees 15-19 (30 min.) Support department cost allocation; direct and step-down methods....
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This note was uploaded on 05/12/2011 for the course ACCT 433b taught by Professor Alfredcontreras during the Spring '11 term at National.

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Week 2 Template - Week 2 Template 14-18 (30 min.) Cost...

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