Week2_Bancroft

Week2_Bancroft - Hotel $16,425,000 9,819,260 6,605,740 0.41...

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1 Hotel Restaurant Revenue $16,425,000 $5,256,000 Direct costs 9,819,260 3,749,172 Segment margin 6,605,740 1,506,828 Segment margin % 0.41 0.09 Fixed overhead costs 5,931,542 1,353,037 Income before taxes 674,198 153,791 2 Hotel Restaurant Direct costs 9,819,260 3,749,172 Direct cost % 0.55 0.21 Square footage 80000 16000 Square footage % 0.5 0.1 Number of employees 200 50 Number of employees % 0.4 0.1 a Hotel Restaurant Revenue $16,425,000 $5,256,000 Direct costs 9,819,260 3,749,172 Segment margin 6,605,740 1,506,828 Allocated fixed overhead costs 8,018,669 3,061,674 Segment pre-tax income (1,412,929) (1,554,846) Segment pre-tax income % of rev. -0.09 -0.30 b Hotel Restaurant Allocated fixed overhead costs 7,275,000 1,455,000 Segment pre-tax income (669,260) 51,828 Segment pre-tax income % of rev. -0.04 0.01 c Hotel Restaurant Allocated fixed overhead costs 5,820,000 1,455,000 Segment pre-tax income 785,740 51,828
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Segment pre-tax income % of rev. 0.05 0.01 3 Requirement 2 shows the dramatic effect of the choice of cost allocation base Pre-tax Income Percen Allocation Base Hotel Restaurant Direct costs -0.09 -0.30 Floor space -0.04 0.01 Number of employees 0.05 0.01
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Casino Rembrandt $12,340,000 $34,021,000 4,248,768 17,817,200 8,091,232 16,203,800 0.50 1 7,265,421 14,550,000 825,811 1,653,800 Casino Rembrandt 4,248,768 17,817,200 0.24 1 64000 160000 0.4 1 250 500 0.5 1 Casino Rembrandt $12,340,000 $34,021,000 4,248,768 17,817,200 8,091,232 16,203,800 3,469,657 14,550,000 4,621,575 1,653,800 0.37 -0.01 Casino Rembrandt 5,820,000 14,550,000 2,271,232 1,653,800 0.18 0.15 Casino Rembrandt 7,275,000 14,550,000 816,232 1,653,800
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0.07 0.12 e on segment pre-tax income as a percentage of revenues: ntage Casino 0.37 0.18 0.07
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Week2_Bancroft - Hotel $16,425,000 9,819,260 6,605,740 0.41...

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