Manama Enterprises, Ltd

Subject:AccountingPrice: Bought3

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Manama Enterprises, Ltd., owns and operates three shopping malls in Bahrain. The company allocates its fixed administrative expenses to the three shopping malls on the basis of sales dollars. Last year the fixed administrative expenses totaled 4,000,000 and were allocated as follows: Shopping Malls Riffa Jufair Issa town SH-1 SH-2 SH-3 Total Total sales-Last Year $24,000,000 $22,000,000 $12,000,000 $58,000,000 Percentage of total sales 38% 35.00% 27 00 100% Allocation (based on the above percentages) $1,520,000 $1,400,000 $1,080,000 $4,000,000 This year the Jutair SH-2 increased its sales by $10 million. The sales levels in the other two restaurants remained unchanged. Required: 1 Using sales dollars as an allocation base, show the allocation of the food administrative expenses among the three stopping maits for this your 2. Calculate the change in each shopping malls allocated cost from last year to this year. As the manager of the Jufair, how would you fool about the amount that has been charged to you for this year? 3. Comment on the usefulness of sales dollars as an allocation base