Question

several costs incurred by cape cod hotel and restaurant

Problem 2-54 Several costs incurred by Cape Cod Hotel and Restaurant are given in the following list.1 indicate which of the following classifications best describe the cost. More apply to the same cost item. cost, list. For each 2-1, 2-3, 2-9, 2-10) than one classification may Cost Classifications Direct cost of the food and beverage department a. Indirect cost of the food and beverage department b. Controllable by the kitchen manager Uncontrollable by the kitchen manager c. d. Controllable by the hotel general manager Uncontrollable by the hotel general manager e. f. g. Differential cost h. Marginal cost i. Opportunity cost j. Sunk cost k. Out-of-pocket cost Cost Items 1. The wages earned by table-service personnel. 2. The salary of the kitchen manager 3. The cost of the refrigerator purchased 14 months ago. The unit was covered by a warranty for 12 months, during which time it worked perfectly. It conked out after 14 months, despite an origi- nal estimate that it would last five years. 4. The hotel has two options for obtaining fresh pies, cakes, and pastries. The goodies can be pur- chased from a local bakery for approximately $1,550 per month, or they can be made in the hotel's kitchen. To make the pastries on the premises, the hotel will have to hire a part-time pastry chef. This will cost $500 per month. The cost of ingredients will amount to roughly $850 per month. Thus, the savings from making the goods in the hotel's kitchen amount to $200 per month. 5. The cost of dishes broken by kitchen employees Chapter 2 Basic Cost Management Concepts 6. The cost of leasing a computer used for reservations, payroll, and general hotel accounting. 7. The cost of a pool service that cleans and maintains the hotel's swimming pool. 8. The wages of the hotel's maintenance employees, who spent nine hours (at $13.50 per hour) repairing the dishwasher in the kitchen. 9. The cost of general advertising by the hotel, which is allocated to the food and beverage department. 10. The cost of food used in the kitchen. 11. The difference in the total cost incurred by the hotel when one additional guest is registered. 12. The cost of space (depreciation) occupied by the kitchen. 13. The cost of space (depreciation) occupied by a sauna next to the pool. The space could otherwise have been used for a magazine and book store. 14. The profit that would have been earned in a magazine and book store, if the hotel had one. 15. The discount on room rates given as a special offer for a "Labor Day Getaway Special."

Answer 1

1.

1. Direct cost of the food and beverage department

2.

1. Direct cost of the food and beverage department

3.

1. Indirect cost of the food and beverage department
2. Uncontrollable by the kitchen manager

4.   

1. Opportunity cost
2. Controllable by the hotel general manager

5.

1. Sunk Cost
2. Uncontrollable by the kitchen manager

6.

1. Controllable by the hotel general manager
2. Indirect cost of the food and beverage department

7.

1. Indirect cost of the food and beverage department
2. Controllable by the hotel general manager

8. a. Out-of-pocket cost

b. Out-of-pocket cost

c. Out-of-pocket cost

9.

1. Indirect cost of the food and beverage department
2. Controllable by the hotel general manager

10.

1. Direct cost of the food and beverage department
2. Controllable by the kitchen manager

11.

1. Marginal Cost
2. Differential cost

12.

1. Direct cost of the food and beverage department
2. Uncontrollable by the kitchen manager

13. Opportunity cost

14. Sunk Cost

15. Out-of-pocket cost