Historically. The Travel Club has distributed advertising costs to its resort sites in Europe on the basis of the size of resort budget. For this year, in round numbers, the budgets and allocation of $1 million advertising indirect costs are follows to the four sites: Budget. S Allocation, $ Guests 1 2 million 200,000 1 3875 Site 2 3 million 300,000 Site 2 3975 4 million 400,000 9200 4 1 million 100.000 4 1550

Essentials of Business Analytics (MindTap Course List)
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Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter11: Linear Optimization Models
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Historically. The Travel Club has distributed advertising costs to its resort sites in Europe on the basis of the size of the
resort budget. For this year, in round numbers, the budgets and allocation of $1 million advertising indirect costs are as
follows to the four sites:
Budget, S
Allocation, S
Guests
1
2 million
200,000
Guests
1
3875
3875
Site
2
3 million
300,000
The allocation for site 1 is $1
The allocation for site 2 is $
The allocation for site 3 is $]
The allocation for site 4 S
Site
2
3975
3
4 million
400,000
Determine the allocation if the ABC method is used with a new basis. Define the activity as the advertising department at each resort
The cost driver is the number of guests during the year.
Site
2
3975
3
9200
4
1 million.
100,000
3
9200
4
1550
4
1550
Transcribed Image Text:Required information Historically. The Travel Club has distributed advertising costs to its resort sites in Europe on the basis of the size of the resort budget. For this year, in round numbers, the budgets and allocation of $1 million advertising indirect costs are as follows to the four sites: Budget, S Allocation, S Guests 1 2 million 200,000 Guests 1 3875 3875 Site 2 3 million 300,000 The allocation for site 1 is $1 The allocation for site 2 is $ The allocation for site 3 is $] The allocation for site 4 S Site 2 3975 3 4 million 400,000 Determine the allocation if the ABC method is used with a new basis. Define the activity as the advertising department at each resort The cost driver is the number of guests during the year. Site 2 3975 3 9200 4 1 million. 100,000 3 9200 4 1550 4 1550
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