Joe does not like the idea because he plans to stay in the room rather than ski. Joe suggests that each type of cost be allocated to each person based on the above-listed allocation bases. Using the activity allocation for each person, calculate the amount that each person would pay based on his own consumption of the activity. Total Number Nate + Meals Eaten Lift Tickets Nights Expense Food Skiing Lodging Nate Food Skiing Lodging Joe Food Skiing Lodging + + + Total estimated overhead Cost Joe = 1 = = Total estimated quantity of 1 the overhead allocation Predetermined Overhead Allocation Rate Total Predetermined Overhead Allocation Rate X X X X X X X X base = Predetermined Overhead Allocation Rate Actual Quantity of the Allocation Base Used Actual Quantity of the Allocation Base Used = = = Total = Total Units per meal per ticket per night Allocated Cost Allocated Cost

Joe does not like the idea because he plans to stay in the room rather than ski. Joe suggests that each type of cost be allocated to each person based on the above-listed allocation bases. Using the activity allocation for each person, calculate the amount that each person would pay based on his own consumption of the activity. Total Number Nate + Meals Eaten Lift Tickets Nights Expense Food Skiing Lodging Nate Food Skiing Lodging Joe Food Skiing Lodging + + + Total estimated overhead Cost Joe = 1 = = Total estimated quantity of 1 the overhead allocation Predetermined Overhead Allocation Rate Total Predetermined Overhead Allocation Rate X X X X X X X X base = Predetermined Overhead Allocation Rate Actual Quantity of the Allocation Base Used Actual Quantity of the Allocation Base Used = = = Total = Total Units per meal per ticket per night Allocated Cost Allocated Cost

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 3Q: Felipes Restaurant and Pie Shop needs help defining the costs for his business. He also wants to...

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Expense	Estimated Costs	Allocation Base	Activity Allocation (Nate)	Activity Allocation (Joe)
Food	$580.00	Number of meals eaten	10	18
Skiing	$210.00	Number of lift tickets	3	0
Lodging	$810.00	Number of nights	5	5
Total	$1,600.00

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