Cost Allocation with Cost Flow Diagram Coastal Computer operates two retail outlets in Oakview, one on Main Street and the other in Lake- land Mall. The stores share the use of a central accounting department. The cost of the accounting department for last year was $175,000. Following are the operating results for the two stores for the year.

Required

a. Allocate the cost of the central accounting department to the two stores based on:
(1) Number of computers sold.
(2) Store revenue.

b. Draw a cost flow diagram to illustrate your answer to requirement (a2).

Transcribed Image Text:

Revenues.... Number of computers sold. Main Street $2,000,000 2,000 Lakeland Mall $3,000,000 1,500