Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Books and Brew (BB) is a large city bookstore that sells books and music CDs, and also has a cafe. Currently, BB uses a single
Books and Brew (BB) is a large city bookstore that sells books and music CDs, and also has a cafe. Currently, BB uses a single driver system to allocate its operating costs to each of its three product lines, using cost of merchandise as the single cost driver. But BB's management is concerned that this allocation system may not be providing the best information for making a variety of pricing decisions, BB's operating costs for 2019 were as follows: $485,000 $412,000 Purchasing department Receiving department Shelf-stocking employee salaries Cashiers and floor employee salaries $489,000 $139,000 2019 information about BB's product lines is also available: Books CDs Cafe $3,662,000 $2.585,000 2,700 $2,192,000 $1,547,000 2,440 $834,000 $555,000 1,910 Revenue Cost of merchandise Number of purchase orders placed Number of deliveries received Hours of shelf stocking time Number of items sold 1,320 15.500 132,000 1,820 13,500 110,000 1,650 10,700 250,000 REQUIRED (ROUND 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 CDs in 2019? Submit Answer Tries 0/6
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started