Allocate the fixed costs to the three divisions

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Reference no: EM131292130

Nairobi shopping mall gives the following data: Hotel Restaurant Shopping Centre Revenues 8,000,000 3,000,000 6,000,000 Direct costs 4,500,000 1,500,000 2,000,000 Floor space (square feet) 40,000 8,000 32,000 Number of employees 200 50 250 Total fixed costs shs 14,000,000 Allocate indirect costs based on direct costs, square feet, or the number of employees. Required: 1. Allocate the fixed costs to the three divisions using each of the three allocation bases suggested 2. Discuss the results clearly indicating the impact of each allocation base. 3. Which division would you recommend for closure and why?

Reference no: EM131292130

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