CMA Intermediate · Cost Accounting · Operating Costing - Transport, Hotel and Healthcare
In hotel costing, laundry and housekeeping costs of the hotel are generally treated as which of the following?
Laundry and housekeeping are service departments, so their costs are apportioned to revenue-earning departments like rooms and restaurant. They are neither capital expenditure nor abnormal losses.
- ADirect revenue of the restaurant only
- BService department costs apportioned to revenue-earning departmentsCorrect
- CAbnormal losses written off to profit and loss
- DCapital expenditure added to building cost
Explanation
Laundry and housekeeping support rooms and other departments, so their cost is apportioned to them. They are routine operating costs, not abnormal losses or capital items.
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