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HELP!!! Books and Brew (BB) is a large city bookstore that sells books and music CD's, and also has a cafe. Currently, BB uses a
HELP!!! Books and Brew (BB) is a large city bookstore that sells books and music CD's, 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 the 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 2018 were as follows:
Books and Brew (BB) is a large city bookstore that sells books and music CD's, 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 the cost of merchandise as the single cost driver. But BB's management is concemed that this allocation system may not be providing the best Information for making a variety of pricing decisions. BB's operating costs for 2018 were as follows: Purchasing department Receiving department Shelf-stocking employee salaries Cashiers and floor employce salaries S479,000 S421,000 S464,000 5130,000 2018 Information about BB's product lines is also available: Books CD's Cafe Revenue Cost of merchandise Number of purchase orders placed Number of deliveries received $3,558,000 $2,511,000 2,640 1,430 16,000 $2,549,000 $1,868,000 2,530 1,540 14,800 $807,000 $565,000 2,190 1,730 Hours of shelf stocking time 11,200 Number of items sold 122,000 101,000 277,000 REQUIRED TROUND ALLOCATION RATES TO THE NEAREST CENT AND ALLOCATIONS TO THE NEAREST DOLLAR.1 Part A [6 tries; 5 points) Using BB's single-driver system to allocate its operating costs, how much was allocated to CD's in 2018? 491,720 Submit Answer You have entered that answer before Incorrect. Tries 2/6 Previous Tries Part B [6 tries; 5 points] If BB had used an activity-based costing system to allocate its operating costs in 2018, how much would have been allocated to the cafe? For cashiers and floor employee salaries, use number of items sold as the cost driver. For all other costs, the appropriate drivers should be clear. 493,261 You are correct. Your receipt no. is 156-7511 Previous TriesStep by Step Solution
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