TB MC Qu. 18-105 (Algo) The amount of nontraceable cost to be allocated to the Harborview Resort using revenue as an allocation base: 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 $ 3,875 80,000 66 $ 110,000 Cost Driver Revenue Square feet Rooms Assets (000s) Crystal Coast $ 6,125 250,000 160 $ 440,000 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 $ 175,000 125,000 560,000 3,140,000 Total $ 10,000 330,000 226 $ 550,000 Determine the amount of nontraceable cost to be allocated to the Harborview Resort using revenue as an allocation base. Multiple Choice O O O O $1,163,000. $2,159,000. $1,550,000. $2,879,000. $1,860,000.
TB MC Qu. 18-105 (Algo) The amount of nontraceable cost to be allocated to the Harborview Resort using revenue as an allocation base: 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 $ 3,875 80,000 66 $ 110,000 Cost Driver Revenue Square feet Rooms Assets (000s) Crystal Coast $ 6,125 250,000 160 $ 440,000 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 $ 175,000 125,000 560,000 3,140,000 Total $ 10,000 330,000 226 $ 550,000 Determine the amount of nontraceable cost to be allocated to the Harborview Resort using revenue as an allocation base. Multiple Choice O O O O $1,163,000. $2,159,000. $1,550,000. $2,879,000. $1,860,000.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter10: Long-lived Tangible And Intangible Assets
Section: Chapter Questions
Problem 16E
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Question
Transcribed Image Text:TB MC Qu. 18-105 (Algo) The amount of nontraceable cost to be allocated to the Harborview Resort using
revenue as an allocation base: 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
$ 3,875
80,000
66
$ 110,000
Cost Driver
Revenue
Square feet
Rooms
Assets (000s)
Crystal Coast
$ 6,125
250,000
160
$ 440,000
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
$ 175,000
125,000
560,000
3,140,000
Total
$ 10,000
330,000
226
$ 550,000
Determine the amount of nontraceable cost to be allocated to the Harborview Resort using revenue as an allocation base.
Transcribed Image Text:Multiple Choice
O
O
O
O
$1,163,000.
$2,159,000.
$1,550,000.
$2,879,000.
$1,860,000.
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