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Books and Brew (BB) is a large city bookstore that sells books and music CDs, and also has a cafe. Prior to this year, BB
Books and Brew (BB) is a large city bookstore that sells books and music CDs, and also has a cafe. Prior to this year, BB used a single-driver system to allocate its operating costs to each of its three product lines, with the number of items sold as the single cost driver. But BB's management was concerned that this allocation system was not providing the best information for making its many pricing decisions. BB's budgeted operating costs or 2021 were as follows: Purchasing department $491,000 Receiving department $412,000 Shelf-stocking employee salaries $461,000 Cashiers and floor employee salaries $125,000 The following is budgeted 2021 information for BB's three product lines: Books CDs Cafe Revenue $3,808,000 $2,220,000 $783,000 $535,000 Cost of merchandise $2,758,000 $1,553,000 Number of purchase orders placed 2,630 2,410 2,030 Number of deliveries received 1,200 1,600 1,490 Hours of shelf stocking time 15,700 13,000 11,500 Number of items sold 117,000 119,000 263,000 REQUIRED (ROUND ALLOCATION RATES TO TWO DECIMAL PLACES.] Part A [6 tries; 5 points] Jsing BB's traditional single driver system to allocate its operating costs in 2021, how much would be allocated to the cafe? 165850 Submit Answer Incorrect. Tries 1/6 Previous Tries Part B [6 tries; 5 points] f BB decided to use an activity-based costing system to allocate its operating costs in 2021, how much would be allocated to Books? For cashiers and floor employee salaries, use number of items sold as the cost driver; or the other three cost categories, it should be clear what the appropriate drivers are. Submit Answer Tries 0/6
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