Question

ABC Hotels’ controller developed the following table for use in activity-based costing.
Calculate the cost of one Presidential Suite using activity-based costing.

Presidential Standard Presidential Total Square Cost per Standard Junior Suite Manufacturing overhead AmountCost driver Suite Check Guest Room Junior Suite Suite Feet 110,000 square feet 471,500 Direct Labor Hours 13,000 purchase square foot Guest room Depreciation 53,200,000 Square feet50,000 30,000 30,000 29.09 $ 1,454,545 S 872,727 872,727 S 3,200,000 Maintenance 1,800,000 Direct labor 180,000 143,000 148,500 53.82 $687,600.00 $546,260.00 $567,270.00 $1,800,000.00 hours Purchasing 5320,000 purchase 2,500 1,500 9,000 $24.62 $61,538.46 36,923.08$221,538.46 320,000.00 #of nspections Units Inspection 5,350 1,000 850 3,500 5158.88 $158,878.50 $135,046.73 $556074.77$850,000.00 Indirect 285 Units manufactured $490,000 manufactur 150 110 25 1,719.30 $257,894.74$189,122.81$42,982.46 $490,000.00 materials ed Supervision Supplies Total $1,700,000 190,000 $8,550,000 #of inspections Units manufactur 5,350 inspections 285 Units manufactured 1,000 850 3500 317.76317,757.01 S270,093.46 $1,112,149.53 $1,700,000.00 5666.67 $100,000.00 $73,333.33 $16,666.67$190,000.00 53,038,213.71 $2,123,506.41| 53,389,408.89$8,550,000.00 150 110 25 234,800 176,420 194,550

Answer 1

Calculate cost of one presidential suite using activity based costing

Cost of one presidential suit = Total Cost of presidential suit/No of unit manufactured

= 3389408.89/25

Cost of one presidential suit = $135576.36 or $135576