The unallocated income statement of De Souza Motel is shown below:
|
Rooms |
F&B |
Total |
Revenue |
257,000 |
133,000 |
390,000 |
Cost of Sales |
|
48,000 |
48,000 |
Payroll and Related Expenses |
60,000 |
30,000 |
90,000 |
Other Direct Expenses |
40,000 |
12,000 |
52,000 |
Total Expenses |
100,000 |
90,000 |
190,000 |
Departmental Income |
157,000 |
43,000 |
200,000 |
Administrative &General |
|
|
60,000 |
Sales&Marketing |
|
|
25,000 |
POM&Utility costs |
|
|
20,000 |
GOP |
|
|
95,000 |
Insurance |
|
|
10,000 |
|
|
|
12,000 |
Total Fixed Charges |
|
|
22,000 |
Income Before Income Taxes |
|
|
73,000 |
Income Taxes |
|
|
30,000 |
Net Income |
|
|
47,000 |
Square Footage: Rooms- 120,000; F&B- 70,000
Required:
1.Which costs are indirect costs? Explain why!
2.Using square footage and the unallocated income statement , prepare a fully allocated income statement.
3.What do the results from part 2 suggest? Support your answer with numbers.
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