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Calculate each hotel respective share

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Question - Boca Resorts operates two five- star hotels: Capone's Spa and Notorious City Retreat. They are considering hosting a joint Christmas party for their employees. Capone's Spa has 200 employees and Notorious City Retreat has 175 employees. If each hotel has a separate Christmas party the cost would be $45 & $50 per employee respectively. If they host a joint Christmas party. the cost per employee is only $40.

Required -

a) Using the stand-alone method, calculate the cost to be allocated to Capone's Spa and to Notorious City Retreat.

b) Calculate each hotel's respective share of the cost using the incremental method. Assume Notorious is the primary party.

Reference no: EM132848600

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