Prepare the first-stage allocations of costs to activity cost pools. 2. The manager of the San Francisco branch of the Jessminder Hotel has provided the following data concerning the transactions of the property during the past year: Activity Total Cost Total Activity at San Francisco Property Check in 136,000 85,000 check ins Check out 92,750 61,020 check outs Other 226,250 9,050 The lowest costs reported by other properties for these activities are displayed below: Activity Lowest among al J.H. properties Check in 1.60 per check in Check out 1.24 per chek out Other 21.00 per other customer transaction On the basis of data listed: a. Compute the activity rates for the activity-based costing system. Round all computations to the nearest whole cent. b. What do these results suggest to you concerning operations at the San Francisco property?
Jessminder Hotels
The operations vice president of Jessminder Hotels has been interested in investigating the efficiency of the hotel's operations. She has been particularly concerned about the costs of handling routine check ins and would like to compare these costs at the hote'l various loocations. If the locations with the most efficient operations cam be identified, their methods can be studied and then replicated elsewhere. While the hotel maintains good records of wages and other costs, there has been no attempt to show how those costs are related to the various services. The operations VP has asked for an activity-based costing study of hotel operations. In particular, she would like to know the cost of check in, check out, and the costs of other customer interactions.
The San Francisco Hotel has submitted the following cost data for last year:
| Totals | |
| Front desk wages | 200,000 |
| Assistant manager salary | 105,000 |
| General manager salary | 150,000 |
| Total cost | 455,000 |
In addition the cost data above, the employees of the San Francisco property have been interviewed concerning how their time was distributed last year across the ctivities included in the activity-based costing study. The results of those interviews appear below:
| Check in | Check out | Other | Totals | |
| Front desk wages | 50% | 40% | 10% | 100% |
| Assistant manager salary | 20% | 5% | 75% | 100% |
| General manager salary | 10% | 5% | 85% | 100% |
Virtually all other costs of the location-rent, depreciation, utilities, and so on- are organization-sustaining costs that cannot be meaningfully assigned to individual customer interactions.
Required:
1. Prepare the first-stage allocations of costs to activity cost pools.
2. The manager of the San Francisco branch of the Jessminder Hotel has provided the following data concerning the transactions of the property during the past year:
| Activity | Total Cost | Total Activity at San Francisco Property |
| Check in | 136,000 | 85,000 check ins |
| Check out | 92,750 | 61,020 check outs |
| Other | 226,250 | 9,050 |
The lowest costs reported by other properties for these activities are displayed below:
| Activity | Lowest among al J.H. properties |
| Check in | 1.60 per check in |
| Check out | 1.24 per chek out |
| Other |
21.00 per other customer transaction |
On the basis of data listed:
a. Compute the activity rates for the activity-based costing system. Round all computations to the nearest whole cent.
b. What do these results suggest to you concerning operations at the San Francisco property?
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