The division margin in terms of percentage before allocation of fixed overhead cost. Given Hotel revenue as $16,425,000 Restaurant revenue as $5,256,000 Casino Revenues $12,340,000 Direct costs of hotel as $9,819,260 Direct costs of restaurant $3,749,172 Direct costs of casino as 4,248,768 Segment margin of hotel as $ 6,605,740 Segment margin of restaurant as $1,506,828 Segment margin of casino as $ 8,091,232 Floor space of hotel as 80,000 sqft Floor space of restaurant 16,000 sqft Floor space of casino as 64,000 sqft No. of employees in hotel as 200 No. of employees in restaurant as 50 No. of employees in casino as 250 Total fixed overhead costs for 2013 were $14,550,000

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Answer 1

Question

Chapter 14, Problem 14.21E

1.

To determine

The division margin in terms of percentage before allocation of fixed overhead cost.

Given

Hotel revenue as $16,425,000

Restaurant revenue as $5,256,000

Casino Revenues $12,340,000

Direct costs of hotel as $9,819,260

Direct costs of restaurant $3,749,172

Direct costs of casino as 4,248,768

Segment margin of hotel as $ 6,605,740

Segment margin of restaurant as $1,506,828

Segment margin of casino as $ 8,091,232

Floor space of hotel as 80,000 sqft

Floor space of restaurant 16,000 sqft

Floor space of casino as 64,000 sqft

No. of employees in hotel as 200

No. of employees in restaurant as 50

No. of employees in casino as 250

Total fixed overhead costs for 2013 were $14,550,000

2.

To determine

The allocation of indirect costs to divisions using three different bases suggested.

3.

To determine

The way to decide how to allocate the indirect costs to the division

4.

To determine

Whether any of the divisions should be closed on the basis of the analysis

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Question

Chapter 14, Problem 14.21E

1.

To determine

The division margin in terms of percentage before allocation of fixed overhead cost.

Given

Hotel revenue as $16,425,000

Restaurant revenue as $5,256,000

Casino Revenues $12,340,000

Direct costs of hotel as $9,819,260

Direct costs of restaurant $3,749,172

Direct costs of casino as 4,248,768

Segment margin of hotel as $ 6,605,740

Segment margin of restaurant as $1,506,828

Segment margin of casino as $ 8,091,232

Floor space of hotel as 80,000 sqft

Floor space of restaurant 16,000 sqft

Floor space of casino as 64,000 sqft

No. of employees in hotel as 200

No. of employees in restaurant as 50

No. of employees in casino as 250

Total fixed overhead costs for 2013 were $14,550,000

2.

To determine

The allocation of indirect costs to divisions using three different bases suggested.

3.

To determine

The way to decide how to allocate the indirect costs to the division

4.

To determine

Whether any of the divisions should be closed on the basis of the analysis

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 14.21E

1.

To determine

The division margin in terms of percentage before allocation of fixed overhead cost.

Given

Hotel revenue as $16,425,000

Restaurant revenue as $5,256,000

Casino Revenues $12,340,000

Direct costs of hotel as $9,819,260

Direct costs of restaurant $3,749,172

Direct costs of casino as 4,248,768

Segment margin of hotel as $ 6,605,740

Segment margin of restaurant as $1,506,828

Segment margin of casino as $ 8,091,232

Floor space of hotel as 80,000 sqft

Floor space of restaurant 16,000 sqft

Floor space of casino as 64,000 sqft

No. of employees in hotel as 200

No. of employees in restaurant as 50

No. of employees in casino as 250

Total fixed overhead costs for 2013 were $14,550,000

2.

To determine

The allocation of indirect costs to divisions using three different bases suggested.

3.

To determine

The way to decide how to allocate the indirect costs to the division

4.

To determine

Whether any of the divisions should be closed on the basis of the analysis

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 14.21E

1.

To determine

The division margin in terms of percentage before allocation of fixed overhead cost.

Given

Hotel revenue as $16,425,000

Restaurant revenue as $5,256,000

Casino Revenues $12,340,000

Direct costs of hotel as $9,819,260

Direct costs of restaurant $3,749,172

Direct costs of casino as 4,248,768

Segment margin of hotel as $ 6,605,740

Segment margin of restaurant as $1,506,828

Segment margin of casino as $ 8,091,232

Floor space of hotel as 80,000 sqft

Floor space of restaurant 16,000 sqft

Floor space of casino as 64,000 sqft

No. of employees in hotel as 200

No. of employees in restaurant as 50

No. of employees in casino as 250

Total fixed overhead costs for 2013 were $14,550,000

2.

To determine

The allocation of indirect costs to divisions using three different bases suggested.

3.

To determine

The way to decide how to allocate the indirect costs to the division

4.

To determine

Whether any of the divisions should be closed on the basis of the analysis

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.21E

1.

To determine

The division margin in terms of percentage before allocation of fixed overhead cost.

Given

Hotel revenue as $16,425,000

Restaurant revenue as $5,256,000

Casino Revenues $12,340,000

Direct costs of hotel as $9,819,260

Direct costs of restaurant $3,749,172

Direct costs of casino as 4,248,768

Segment margin of hotel as $ 6,605,740

Segment margin of restaurant as $1,506,828

Segment margin of casino as $ 8,091,232

Floor space of hotel as 80,000 sqft

Floor space of restaurant 16,000 sqft

Floor space of casino as 64,000 sqft

No. of employees in hotel as 200

No. of employees in restaurant as 50

No. of employees in casino as 250

Total fixed overhead costs for 2013 were $14,550,000

2.

To determine

The allocation of indirect costs to divisions using three different bases suggested.

3.

To determine

The way to decide how to allocate the indirect costs to the division

4.

To determine

Whether any of the divisions should be closed on the basis of the analysis

Answer 6

Chapter 14, Problem 14.21E

1.

To determine

The division margin in terms of percentage before allocation of fixed overhead cost.

Given

Hotel revenue as $16,425,000

Restaurant revenue as $5,256,000

Casino Revenues $12,340,000

Direct costs of hotel as $9,819,260

Direct costs of restaurant $3,749,172

Direct costs of casino as 4,248,768

Segment margin of hotel as $ 6,605,740

Segment margin of restaurant as $1,506,828

Segment margin of casino as $ 8,091,232

Floor space of hotel as 80,000 sqft

Floor space of restaurant 16,000 sqft

Floor space of casino as 64,000 sqft

No. of employees in hotel as 200

No. of employees in restaurant as 50

No. of employees in casino as 250

Total fixed overhead costs for 2013 were $14,550,000

Answer 7

Chapter 14, Problem 14.21E

1.

To determine

The division margin in terms of percentage before allocation of fixed overhead cost.

Given

Hotel revenue as $16,425,000

Restaurant revenue as $5,256,000

Casino Revenues $12,340,000

Direct costs of hotel as $9,819,260

Direct costs of restaurant $3,749,172

Direct costs of casino as 4,248,768

Segment margin of hotel as $ 6,605,740

Segment margin of restaurant as $1,506,828

Segment margin of casino as $ 8,091,232

Floor space of hotel as 80,000 sqft

Floor space of restaurant 16,000 sqft

Floor space of casino as 64,000 sqft

No. of employees in hotel as 200

No. of employees in restaurant as 50

No. of employees in casino as 250

Total fixed overhead costs for 2013 were $14,550,000

Answer 8

2.

To determine

The allocation of indirect costs to divisions using three different bases suggested.

Answer 9

2.

To determine

The allocation of indirect costs to divisions using three different bases suggested.

Answer 10

3.

To determine

The way to decide how to allocate the indirect costs to the division

Answer 11

3.

To determine

The way to decide how to allocate the indirect costs to the division

Answer 12

4.

To determine

Whether any of the divisions should be closed on the basis of the analysis

Answer 13

4.

To determine

Whether any of the divisions should be closed on the basis of the analysis

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 14 - Prob. 14.1Q Ch. 14 - Why is customer-profitability analysis an...Ch. 14 - Prob. 14.3Q Ch. 14 - A customer-profitability profile highlights those...Ch. 14 - Give examples of three different levels of costs...Ch. 14 - What information does the whale curve provide?Ch. 14 - A company should not allocate all of its corporate...Ch. 14 - What criteria might managers use to guide...Ch. 14 - Once a company allocates corporate costs to...Ch. 14 - A company should not allocate costs that are fixed...

The allocation of indirect costs to divisions using three different bases suggested.

The way to decide how to allocate the indirect costs to the division

Whether any of the divisions should be closed on the basis of the analysis

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Chapter 14 Solutions