Question

I I only need help with a-2 please! I'm stuck! Thank you!

Pacific Hotels operates a centralized call center for the reservation needs of its hotels. Costs associated with use of the center are charged to the hotel group (luxury, resort, standard, and budget) based on the length of time of calls made (time usage). Idle time of the reservation agents, time spent on calls in which no reservation is made, and the fixed cost of the equipment are allocated based on the number of reservations made in each group. Due to recent increased competition in the hotel industry, the company has decided that it is necessary to better allocate its costs in order to price its services competitively and profitably. During the most recent period for which data are available, the use of the call center for each hotel group was as follows. Time Usage (thousands of minutes) 320 Division Luxury Resort Standard Budget Number of Reservations (thousands) 112 144 400 944 160 640 480 During this period, the cost of the call center amounted to $890,000 for personnel and $630,000 for equipment and other costs. Required: a-1. Determine the allocation to each of the divisions using a single rate based on time used. a-2. Determine the allocation to each of the divisions using the Dual rates based on time used for personnel costs) and number of reservations (for equipment and other cost). Complete this question by entering your answers in the tabs below. Req A1 Req A2 Determine the allocation to each of the divisions using the Dual rates based on time used (for personnel costs) and number of reservations (for equipment and other cost). (Do not round Intermediate calculations.) Allocated Cost Department Luxury Resort Standard Budget

Answer 1

Department Luxury Resort Standard Budget Allocated Cost 222,100 145,700 513,500 638,700 Working Notes: Divison Minutes [A] Luxury Resort Standard Budget Total 320 160 640 Personnel Cost Equipment & Other costs Proporation of Proporation of total Allocated total minuts Allocated Cost Reservation reservation Costs [B= A / Total time] (B x $890,000] [D] [E = D/ Total Reservation][E $630,000] 0.20 178,000 112 0.07 44,100 0.10 89,000 144 0.09 56,700 0.40 356,000 400 0.25 157,500 0.30 267,000 0.59 371,700 890,000 1,600 630,000 480 944 1,600 Equipment & Other costs Personal Cost [A] [B] Luxury Resort Standard Budget Total 178,000 89,000 356,000 267,000 890,000 $ 44,100 56,700 157,500 371,700 630,000 Allocated Cost [A +B] 222,100 145,700 513,500 638,700 1,520,000 $ Calculation of Proportion Minutes Luxury 320/1,600 Resort 160/1,600 Standard 640/1,600 Budget 480/1,600 Reservation 112/1,600 144/1,600 400/1,600 944/1,600