Departmental Cost Allocation in Profit Centers Elvis Wilbur owns two restaurants, the BeefBarn and the Fish Bowl. Each restaurant is treated as a profit center for performance evaluation.Although the restaurants have separate kitchens, they share a central baking facility. The principalcosts of the baking area include depreciation and maintenance on the equipment, materials, supplies,and labor.Required1. Elvis allocates the monthly costs of the baking facility to the two restaurants based on the number oftables served in each restaurant during the month. In April the costs were $24,000, of which $12,000is fixed cost. The Beef Barn and the Fish Bowl each served 3,000 tables. How much of the joint costshould be allocated to each restaurant?a. Beef Barn: $16,000; Fish Bowl: $8,000b. Beef Barn: $8,000; Fish Bowl: $16,000c. Beef Barn: $10,000; Fish Bowl: $14,000d. Beef Barn: $12,000; Fish Bowl: $12,000
Departmental Cost Allocation in Profit Centers Elvis Wilbur owns two restaurants, the Beef
Barn and the Fish Bowl. Each restaurant is treated as a profit center for performance evaluation.
Although the restaurants have separate kitchens, they share a central baking facility. The principal
costs of the baking area include
and labor.
Required
1. Elvis allocates the monthly costs of the baking facility to the two restaurants based on the number of
tables served in each restaurant during the month. In April the costs were $24,000, of which $12,000
is fixed cost. The Beef Barn and the Fish Bowl each served 3,000 tables. How much of the joint cost
should be allocated to each restaurant?
a. Beef Barn: $16,000; Fish Bowl: $8,000
b. Beef Barn: $8,000; Fish Bowl: $16,000
c. Beef Barn: $10,000; Fish Bowl: $14,000
d. Beef Barn: $12,000; Fish Bowl: $12,000
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