Question

Coastal Computer operates two retail outlets in Oakview, one on Main Street and the other in Lakeland Mall. The stores share the use of a central accounting department. The cost of the accounting department for last year was $177,000. Following are the operating results for the two stores for the year. Sales revenues Number of computers sold $ Main Street 1.930,200 3,136 Lakeland Mal $ 2.073 800 1,764 Required: a. Allocate the cost of the central accounting department to the two stores based on: 1. Number of computers sold (Do not round intermediate calculations.) Main Street Lakeland Mall Total Allocated accounting department cost 2. Store revenue (Do not round intermediate calculations.) Main Street Lakeland Mall Total Allocated accounting department cost

Answer 1

solution 1. Number of computers sold . I main street Lakeland Mall Allocated Accounting Department cost 113280 63720 177000 Note: 5) Main Street =) (177000 x 3136) / 4900 = 113280 b) Lake Lord = (177000 X 1764)/ 4900 = 63720 Store revenue Lakeland Main Street Total Mall | Allocated Accounting Department cost | 74340 102660 77000 Note: a) Main Street - (177000 X 1936200/4608800 = 74340 6) Lake Land = (177000 x 2673800)/4600000 = 102660