detailed solitions would be helpful but arent neccesary.
Origin This is a cost allocation problem for a merchandising firm. Since merchandising firme do not have overhead, you must allocate operating costs instead of overhead costs. Also, the allocations in this problem are to a department, not to a productor job. Nonetheless, the allocation process is the same. Just follow the three steps used in the lectures 1. Read the problem and question carefully to determine the cost driver 2. Compute the overhead rate budgeted operating costs /budgeted driver 3. Allocate to the specific department - overhead rate x driver for the specific department Remember that with activity based costing (Part), there is more than one driver and more than one rate, and the allocation to a department is the sum of several Individual allocations Each part of the problem is worth five points, and you get six tres per part Tuy Aggins tools and brow() is a large oty bookstore that sets books and CDs, and career to this year, 18 seda single driver system to tecate its operating costs to each of its tres product lines with cost of merchante e cost dover. It's management was concerned that location system was not providing the best Information for making its many pricing decision 08/6 budgeted operating costs for 2021 were as follows Purchasing department 1457.000 Receiving department 1441.000 Shelf stocking employees $482.000 Cashiers and or employees $144,000 The towing is budgeted 2001 information for three productes Documenta Cafe Revenue Cost of merchandise Number of purchase orders placed Number of deliveries received Hours of shelf stocking time Number of items sold Books 34.014,000 $2.948.000 2.720 1,380 14,200 111,000 12,229,000 $1.570,000 2.580 1,590 14,500 105,000 3768.000 $525.000 2,140 1,760 10.500 259,000 A. The following is budgeted 2021 information for Be's three product lines Books CDs Cafe Revenue $2,229,000 Cost of merchandise Number of purchase orders placed Number of deliveries received Hours of shelf stocking time Number of items sold $4,014,000 $2,948,000 2,720 1,380 14,200 111,000 $1,570,000 2,560 1,590 14,500 105,000 $768,000 $525,000 2,140 1,760 10,500 259,000 REQUIRED (ROUND ALLOCATION RATES TO TWO DECIMAL PLACES.) Part A [6 tries; 5 points] Using BB's traditional single driver system to allocate its operating costs in 2021, how much would be allocated to Books? Submit Answer Incorrect. Tries 2/6 Previous: Tries Part B [6 tries; 5 points) If BB decided to use an activity-based costing system to allocate its operating costs in 2021, how much would be allocated to the cafe? 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
