I have an assignment for accounting course.

Please refer to the attached file.

Assignment Assignment Information Alain Bookshop and Caf (ABC) is a large city bookstore that sells books and music CDs and has a caf. ABC operates at capacity and allocates selling, general and administration costs to each product line using the cost of merchandise of each product line. ABC wants to optimize the pricing and cost management of each product line. ABC is wondering if its accounting system is providing it with the best information for making such decisions. Alain Books and Caf Product Line Information For the Year Ended December 31, 2014 Books CDs Caf Revenues $3,720,480 $2,315,360 $736,216 Cost of merchandise $2,656,727 $1,722,311 $556,685 Cost of caf cleaning $18,250 Number of purchase orders placed 2,800 2,500 2,000 Number of deliveries received 1,400 1,700 1,600 Hours of shelf stocking time 15,000 14,000 10,000 Items sold 124,016 115,768 368,108 ABC incurs the following selling, general and administration costs: Alain Books and Caf Selling, General, and Administration Costs For the Year Ended December 31, 2014 Purchasing department expenses Receiving department expense Shell stocking labour expense Customer support expense (cashiers and floor employees) $474,500 $432,400 $487,500 $91,184 $1,485,584 Required 1. Prepare product line and total company income statements, assuming that ABC uses cost of merchandise to allocate all selling, general and administration costs. 2. Identify and explain an improved method for allocating each of the selling, general and administration costs to the three product lines. 3. Prepare product line and total company income statements, using the method you have identified in 2. above to allocate all selling, general and administration costs. 4. Compare your results in 3 above with those in 1 Above. 5. Write a memo to ABC management describing how the improved system you propose might be useful for managing the store