pdf Class Activity- Overheads 1. A large hotel has recently reorganized its cost

Question

pdf Class Activity- Overheads 1. A large hotel has recently reorganized its costing system and split its activities into four cost centres as follows. (a) Accommodation (b) Catering (c) Leisure (d) Outings The hotel is moving towards standardizing its services and selling a hotel package to its customers who will include accommodation, meals, use of leisure facilities and a number of outings. There is to be a pre-determined price per day for the use of each cost centre by the customers Labour and material can be identified and allocated to the cost centres in the budget but other owerheads lised below cannot be so readily dentfed. AccommodationCatering Leisure Outings Total Labour Materials Power Rent & rates Depreciation Advertising Office experises 284,000 84,000 84,000 72,000 110,000 100,500 35,000 38,500 19,000 36,000 16,000 13,000 76,000 240,000 Yoet are given thr fallowing adelitionsi information shout the cost centres from the budget the comsing year

Explanation / Answer

Accommodation Catering Leisure Outings Total Labor $ 110,000 $ 100,500 $ 35,000 $ 38,500 $ 284,000 Materials 19,000 36,000 16,000 13,000 84,000 Power 20,000 10,000 50,000 4,000 84,000 Rent and Rates 36,000 12,000 18,000 6,000 72,000 Depreciation 5,000 10,000 30,000 15,000 60,000 Advertising 30,000 24,000 16,000 6,000 76,000 Total Cost before Office Expenses 220,000 192,500 165,000 82,500 660,000 Office Expenses 80,000 70,000 60,000 30,000 240,000 Budgeted Total Cost 300,000 262,500 225,000 112,500 900,000 Expected Customer Usage in Days 15,000 12,000 8,000 3,000 Budgeted Cost per Customer Day $ 20 $ 21.875 $ 28.125 $ 37.50

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