Roberto’s Markets, Inc., has three grocery stores in the metropolitan Atlanta area. The company allocates central costs using sales as the cost-allocation base. The following are budgeted and actual sales during November:

Central costs of $360,000 are to be allocated in November.

1. Compute the central costs allocated to each store with budgeted sales as the cost-allocation base.

2. Compute the central costs allocated to each store with actual sales as the cost-allocation base.

3. What advantages are there to using budgeted rather than actual sales for allocating the central costs?

Transcribed Image Text:

Budgeted sales Actual sales Bellevue $600,000 600,000 Richfield $1,000,000 700,000 Hightower $400,000 500,000