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The following data pertain to the Waikiki Sands Hotel for the month of March.
Required: Prepare a March performance report similar to the lower portion of Exhibit 12-4. The report
should have six numerical columns with headings analogous to those in Exhibit 12-4. Your performance
report should cover only the Food and Beverage Department and the Kitchen. Draw arrows to show the
relationships between the numbers in the report. Refer to Exhibit 12-4 for guidance. For the year to date
columns in your repot, use the data given in Exhibit 12-4. You will need to update those figures using the
March data given above.
Countrywide Cable Services, Inc., is organized with three segments; Metro, Suburban, and Outlying. Data
for these segments for the year just ended follow.
Required:
Prepare a segmented income statement for Countywide Cable Services, Inc. Use the contribution format.
Here is your chance to be a tycoon. Create your own company. You will be the president and chief executive
officer. It could be a manufacturer, retailer, or service industry firm, but not a hotel or bank. Draw an
organization chart for your company, similar to the one in Exhibit 12-1. Identify divisions and departments at all
levels in the organization. Then prepare a companion chart similar to the one in Exhibit 12-2. This chart should
designate the title of the manager of a subunit at each level in the organization. It also should designate the type
of responsibility center appropriate for each of these subunits. Finally, write a letter to your company's
stockholders summarizing the major responsibilities of each of the managers you identified in your chart. For
guidance, refer to the discussion of Exhibits 12-1 and 12-2inthe chapter. (Have some fun, and be creative.)
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ACCOUNTING FOR DECISION MAKING – CHAPTER # 12
The following partial organization chart is an extension of Exhibit 12-1 for Aloha Hotels and Resorts.
Each of the hotel's five main departments is managed by a director (e.g., director of hospitality). The Front Desk
subunit, which is supervised by the front desk manager, handles the hotel's reservations, room assignments, guest
payments, and key control. The Bell Staff, managed by the bell captain, is responsible for greeting guests, front door
service, assisting guests with their luggage, and delivering room-service orders. The Guest Services subunit, supervised
by the manager of Guest Services, is responsible for assisting guests with local transportation arrangements, advising
guests on tourist attractions, and such conveniences as valet and floral services.
Required: As an outside consultant, write a memo to the hotel's general manager suggesting a responsibility-
center designation for each of the subunits shown in the organization chart above. Justify your
choices.
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ACCOUNTING FOR DECISION MAKING – CHAPTER # 12
Shown below are the amounts of each cost allocation base associated with each division.
Required:
1. Prepare a table similar to Exhibit 12-5 that distributes each of the costs listed in the preceding table to
the hospital's divisions.
2. Comment on the appropriateness of patient billings as the basis for distributing community outreach
costs to the hospital's divisions. Can you suggest a better allocation base?
3. Is there any use in allocating utilities costs to the divisions? What purposes could such an allocation
process serve?
• The sales volume, sales price, and purchase price data follow:
• The following expenses were incurred for sales commissions, local advertising, property taxes, man-
agement salaries, and other non-controllable (but traceable) costs:
Local advertising decisions are made at the store manager level. The sales manager's salary in Sacramento is
determined by the Sacramento store manager; in contrast, store manager salaries are set by Show-Off s vice
president.
Required:
1. Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off.
2. Determine the weakest-performing store and present an analysis of the probable causes of poor
performance.
3. Assume that an opening has arisen at the Reno corporate headquarters and the company's chief
executive officer (CEO) desires to promote one of the three existing store managers. In evaluating the
store managers' performance, should the CEO use a store's segment contribution margin, the profit
margin controllable by the store manager, or a store's segment profit margin? Justify your answer.
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