90.2K

Verified Solution

Link Copied!

RM The Red Carpet is developing a cost accounting system. Initially the hotel decided to create four cost centres: Residential and Catering deal directly with customers while Housekeeping and Maintenance are internal service cost centres. RM Consumable materials - Residential 14,000 - Catering 23,000 - House-keeping 27,000 - Maintenance 9.000 73,000 Staff costs - Residential 16,500 - Catering 13,000 -House-keeping 11,500 - Maintenance 5,500 46.500 Rent and rates 37,500 I ACC3208 (F) /Page 5 of 5 Hotel contents insurance Heating and lighting Depreciation on equipment etc TOTAL 14,000 18,500 37.500 227,000 MacBook Air 14 PII F6 F2 FO FO FIO F11 *5WS Depreciation on equipment etc 37.500 TOTAL 227,000 The following particulars are available: Particulars Residential Catering House-keeping Maintenance Area occupied (sq. metres) 2,750 1,350 300 Number of personnel 20 20 15 5 Book value of equipment RM 350,000 RM250,000 RM75,000 RM75,000 Red Carpet estimated that there will be 2,800 guest-nights and 16,000 meals will be served. Housekeeping works 70% for Residential and 30% for Catering, and Maintenance works 20% for Housekeeping, 30% for Catering and 50% for Residential 600 Required: cost centre. (a) Prepare an overhead statement showing clearly allocations and apportionments to each (10 marks) (b) Calculate appropriate overhead absorption rates for Residential and Catering (2 marks) (e) Discuss TWO (2) unfavourable impacts that may arise if Red Carpet uses inappropriate bases in apportioning its overhead to the departments. (5 marks) (d) Discuss TWO (2) importance of overhead allocation for Red Carpet. Please remember to relate your answers to the business nature of the hotel. (8 marks) Total: 25 marks -THE END- MacBook Air

Answer & Explanation Solved by verified expert

See Answer