TB MC Qu. 18-107 (Algo) The amount of cost to be allocated to the Harborview Resort: Sand and Sea Resorts Sand and Sea Resorts owns and operates two resorts in a coastal town. Both resorts are located on a barrier island that is connected to the mainland by a high bridge. One resort is located on the beach and is called the Crystal Coast Resort. The other resort is located on the inland waterway which passes between the town and the mainland; it is called the Harborview Resort. Some key information about the two resorts for the current year is shown below. Revenue (000s) Square feet Rooms Assets (000s) Harborview $ 3,500 75,000 60 $ 178,000 Cost Driver Revenue Square feet Rooms Assets (000s) The nontraceable operating costs of the resort amount to $4,000,000. By careful study, the management accountant at Sand and Sea has determined that, while the costs are not directly traceable, the total of $4 million could be fairly allocated to the four cost drivers as follows. Amount Allocated Crystal Coast $ 6,500 225,000 140 $ 712,000 $ 290,000 165,000 600,000 2,945,000 Total $ 10,000 300,000 200 $ 890,000 Using the information regarding the allocation of the $4 million to the four cost drivers, determine the amount of cost to be allocated to the Harborview Resort.
TB MC Qu. 18-107 (Algo) The amount of cost to be allocated to the Harborview Resort: Sand and Sea Resorts Sand and Sea Resorts owns and operates two resorts in a coastal town. Both resorts are located on a barrier island that is connected to the mainland by a high bridge. One resort is located on the beach and is called the Crystal Coast Resort. The other resort is located on the inland waterway which passes between the town and the mainland; it is called the Harborview Resort. Some key information about the two resorts for the current year is shown below. Revenue (000s) Square feet Rooms Assets (000s) Harborview $ 3,500 75,000 60 $ 178,000 Cost Driver Revenue Square feet Rooms Assets (000s) The nontraceable operating costs of the resort amount to $4,000,000. By careful study, the management accountant at Sand and Sea has determined that, while the costs are not directly traceable, the total of $4 million could be fairly allocated to the four cost drivers as follows. Amount Allocated Crystal Coast $ 6,500 225,000 140 $ 712,000 $ 290,000 165,000 600,000 2,945,000 Total $ 10,000 300,000 200 $ 890,000 Using the information regarding the allocation of the $4 million to the four cost drivers, determine the amount of cost to be allocated to the Harborview Resort.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Multiple Choice
O
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$1,070,000.
$911,750.
$1,528,000.
$728,000.
$1,711,000.
Transcribed Image Text:TB MC Qu. 18-107 (Algo) The amount of cost to be allocated to the Harborview Resort: Sand and Sea
Resorts
Sand and Sea Resorts owns and operates two resorts in a coastal town. Both resorts are located on a barrier island that is
connected to the mainland by a high bridge. One resort is located on the beach and is called the Crystal Coast Resort. The
other resort is located on the inland waterway which passes between the town and the mainland; it is called the Harborview
Resort. Some key information about the two resorts for the current year is shown below.
Revenue (000s)
Square feet
Rooms
Assets (000s)
Harborview
$ 3,500
75,000
60
$ 178,000
Cost Driver
Revenue
Square feet
Rooms
Assets (000s)
Crystal Coast
$ 6,500
225,000
140
$ 712,000
The nontraceable operating costs of the resort amount to $4,000,000. By careful study, the management accountant at
Sand and Sea has determined that, while the costs are not directly traceable, the total of $4 million could be fairly allocated
to the four cost drivers as follows.
Amount
Allocated
$ 290,000
165,000
600,000
2,945,000
Total
$ 10,000
300,000
200
$ 890,000
Using the information regarding the allocation of the $4 million to the four cost drivers, determine the amount of cost to be
allocated to the Harborview Resort.
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