Le Pavilion is a historic hotel just outside of Melbourne. It is owned by Refined Hotels, which operates additional properties in Sydney, Brisbane and Perth. Le Pavilion has 9 floors, with approximately 20 rooms per floor. Facilities also include a workout room, restaurant, and pool. The hotel is organised in 5 departments: front desk, engineering, housekeeping, food & beverage, and customer relations. As part of its operation, Le Pavilion regularly incurs the following costs: General manager's salary
Housekeeping supplies
Utility costs
Depreciation on workout room equipment
Advertising
Food and beverage costs
Depreciation on restaurant equipment
Le Pavilion could define its cost objects as
I Customers only
II Departments only
III Number of employees

Question

Quizplus · Accepted Answer

Cost objects refer to the items or activities for which costs are assigned. In this case, Le Pavilion incurs costs for various departments and its customers. Therefore, the cost objects for the hotel could be defined as both departments and customers, which are covered in options I and II. However, the number of employees is not a relevant cost object as it does not directly contribute to the costs incurred by the hotel. Therefore, option D can be eliminated. Hence, the best choice is option B, which defines the cost objects as both customers and departments.

Le Pavilion Is a Historic Hotel Just Outside of Melbourne