Question

Books and Brew (6) is a large cty bookstore that sells books and musk CDs, and also has a cafe. Currently, uses a single driver system to allocate its operating costs to each of its three product lines, using the number of Rems sold as the single cost driver. But Boy's management is concerned that this allocation system may not be providing the best Information for making a variety of pricing decisions. Bo's operating costs for 2019 were as follows: Purchasing department Receiving department Shelf-stocking employee salaries Cashiers and floor employee salaries $479,000 $419,000 $400,000 $103,000 2019 information about s's product lines is also available: Books Cafe Revenue Cost of merchandise $3,744,000 $2,519,000 2,620 1,250 CDs $2,350,000 $1,799,000 2,430 1.540 $861,000 $565,000 1.920 1,400 Number of purchase orders placed Number of deliveries received Hours of shelf stocking time Number of items sold 15,500 14,600 10,600 260,000 130,000 104,000 REQUIRED TROUND ALLOCATION RATES TO THE NEAREST CENT AND ALLOCATIONS TO THE NEAREST DOLLAR) Part A [6 tries; 5 points) Using BB's single-driver system to allocate its operating costs, how much was allocated to the cafe in 20197 Submit Answer Incorrect. Tries 3/6 Previous Tres Part B [6 tries; 5 points) If BB had used an activity-based costing system to allocate its operating costs in 2019, how much would have been allocated to CDs? For cashiers and floor employee salaries, use number of items sold as the cost driver; for the other three cost categories, it should be clear what the appropriate drivers are.

Answer 1

POENO DATE X2430 69 70 Total No of Purchase Onders Placed=2620 +2430 + 1920 = 6970 Purchasing Dept cost allocated to CBs = 479.000 =$166997.15 (A) Deliveries Received =1250+ 1540 + 1400 =4190 Receiving beft cost Allocated - 419000 x 1500 $154000 (8) Total No. of 4190 To tal No. of shelf Stocking Time Hrs = 15500 + 14600+ 10600 =40700 Yo 700 Shelf Stocking Employce salary allocated to CDs = 480000 X 14600 $112186 . 73 (c) Total No. of Units sold = 130000 + 104000+ 260000 49000

PACER DATE +103 UUD A Total operating cost = 479 000 + 419000 + 480000 1481000 Total No. of Iteme sold collectie collectively No of Items sold in Cafee Operating cost allocated to cafe_148100_ X 2600.00 =$779 13 + 14 + 240000 49 400D = 26000D 494 up 779473.68 & Cost Driver for Purchasing saft = No. of Purchase Order Placed For Receiving Deft No. of Deliveries Received For Shelf stocking Employce Salary Hours of Shelf stocking For Cashier of Floor Employce salary = No. of Items sold

DATE Cashier of Floor Employee salary allocated to CDs 1030 X 10 4000 49 400 $216 84.21 (A) Total operating Cost allocated to CDs - $514868.07 A+B+CTA OA Shot on OnePlus