Solution-What is the operating profit of the crystal coast

What is the operating profit of the crystal coast resort

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Reference no: EM133172438

Question - Sand and Sea Resorts owns and operates two resorts in a coastal town. Both resorts are located on a barrier island that is connected to the mainland by a high bridge. One resort is located on the beach and is called the Crystal Coast Resort. The other resort is located on the inland waterway which passes between the town and the mainland; it is called the Harborview Resort. Some key information about the two resorts for the current year is shown below.

	Harborview	Crystal Coast	Total
Revenue (000s)	$3,700	$6,300	$10,000
Square feet	80,000	240,000	320,000
Rooms	63	150	213
Assets (000s)	$110,000	$420,000	$530,000

The nontraceable operating costs of the resort amount to $4,000,000. By careful study, the management accountant at Sand and Sea has determined that, while the costs are not directly traceable, the total of $4 million could be fairly allocated to the four cost drivers as follows.

Cost Driver	Amount Allocated
Revenue	$200,000
Square feet	100,000
Rooms	520,000
Assets (000s)	3,180,000

Required - What is the operating profit of the Crystal Coast Resort, using revenue as an allocation base?

Reference no: EM133172438

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What is the operating profit of the crystal coast resort

Reference no: EM133172438

Reference no: EM133172438

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