Woodland Hotels, Inc., operates four resorts in the heavily wooded areas of northern California. The resorts are named after the predominant trees at the resort: Pine Valley, Oak Glen, Mimosa, and Birch Glen. Woodland allocates its central office costs to each of the four resorts according to the annual revenue the resort generates. For the current year, the central office costs (000s omitted) were as follows: Front office personnel (desk, clerks, etc.) $9,500
Administrative and executive salaries 5,500
Interest on resort purchase 4,500
Advertising 1,350
Housekeeping 3,500
Depreciation on reservations computer 830
Room maintenance 950
Carpet-cleaning contract 80
Contract to repaint rooms 550
Costs to be allocated $26,760
Pine Valley Oak Glen Mimosa Birch Glen Total
Revenue (000s) $6,850 $9,495 $9,007 $9,550 $34,902
Square feet 56,975 78,099 43,274 85,164 263,512
Rooms 101 137 81 189 508
Assets (000s) $93,845 $138,245 $73,855 $58,999 $364,944
Required:
1) Based on annual revenue, what amount of the central office costs are allocated to each resort? (Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest dollar.)
2) Suppose that the current method were replaced with a system of four separate cost pools with costs collected in the four pools allocated on the basis of revenues, assets invested in each resort, square footage, and number of rooms, respectively. Which costs should be collected in each of the four pools? (Enter your answers in thousands of dollars.)
3) Using the cost pool system in requirement 2, how much of the central office costs would be allocated to each resort? (Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest dollar.)