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Harborview Crystal Coast Total Revenue (000s)$3,500 $6,500 $10,000 Square feet 75,000 225,000 300,000 Rooms 60 140 200 Assets (000s)$100,000 $400,000 $500,000
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 DriverAmount AllocatedRevenue$200,000 Square feet 100,000 Rooms 600,000 Assets (000s) 3,100,000
The Crystal Coast resort is likely to be favored in terms of a lower cost allocation under: