Joe does not like the idea because he plans to stay in the room rather than ski. Joe suggests that each type of cost be allocated to each person based on the above-listed allocation bases. Using the activity allocation for each person, calculate the amount that each person would pay based on his own consumption of the activity. Total Number Nate + Meals Eaten Lift Tickets Nights Expense Food Skiing Lodging Nate Food Skiing Lodging Joe Food Skiing Lodging + + + Total estimated overhead Cost Joe = 1 = = Total estimated quantity of 1 the overhead allocation Predetermined Overhead Allocation Rate Total Predetermined Overhead Allocation Rate X X X X X X X X base = Predetermined Overhead Allocation Rate Actual Quantity of the Allocation Base Used Actual Quantity of the Allocation Base Used = = = Total = Total Units per meal per ticket per night Allocated Cost Allocated Cost
Joe does not like the idea because he plans to stay in the room rather than ski. Joe suggests that each type of cost be allocated to each person based on the above-listed allocation bases. Using the activity allocation for each person, calculate the amount that each person would pay based on his own consumption of the activity. Total Number Nate + Meals Eaten Lift Tickets Nights Expense Food Skiing Lodging Nate Food Skiing Lodging Joe Food Skiing Lodging + + + Total estimated overhead Cost Joe = 1 = = Total estimated quantity of 1 the overhead allocation Predetermined Overhead Allocation Rate Total Predetermined Overhead Allocation Rate X X X X X X X X base = Predetermined Overhead Allocation Rate Actual Quantity of the Allocation Base Used Actual Quantity of the Allocation Base Used = = = Total = Total Units per meal per ticket per night Allocated Cost Allocated Cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Nate and Joe have been friends since grade school and decided to go on a skiing trip to Stowe, Vermont this January.
The estimated the following for the trip:
| Expense | Estimated Costs | Allocation Base | Activity Allocation (Nate) | Activity Allocation (Joe) |
|---|---|---|---|---|
| Food | $580.00 | Number of meals eaten | 10 | 18 |
| Skiing | $210.00 | Number of lift tickets | 3 | 0 |
| Lodging | $810.00 | Number of nights | 5 | 5 |
| Total | $1,600.00 |
(Round your answers to two decimal places when needed and use rounded answers for all future calculations).
Transcribed Image Text:Joe does not like the idea because he plans to stay in the room rather than ski. Joe suggests that each type
of cost be allocated to each person based on the above-listed allocation bases.
Using the activity allocation for each person, calculate the amount that each person would pay based on his
own consumption of the activity.
Total Number
Meals Eaten
Lift Tickets
Nights
Expense
Food
Skiing
Lodging
Nate
Food
Skiing
Lodging
Joe
Food
Skiing
Lodging
Nate +
+
+
+
Total estimated
overhead Cost
Joe
=
1
=
=
Total estimated quantity of
1 the overhead allocation
Predetermined Overhead
Allocation Rate
Total
Predetermined Overhead
Allocation Rate
X
X
X
X
X
X
X
X
base
=
Predetermined Overhead
Allocation Rate
Actual Quantity of the
Allocation Base Used
Actual Quantity of the
Allocation Base Used
=
=
=
Total
=
Total
Units
per
meal
per
ticket
per
night
Allocated
Cost
Allocated
Cost
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