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Johnny's Markets, Inc., has three grocery stores in the metropolitan Philadelphia area. The company allocates ceentral costs using sales as the cost-allocation base. The
Johnny's Markets, Inc., has three grocery stores in the metropolitan Philadelphia area. The company allocates ceentral costs using sales as the cost-allocation base. The following are budgeted and actual sales during November: Irving Bainbridge Fitzwater Budgeted sales $ 500,000 $ 1,120,000 $ Actual sales 330,000 500,000 750,000 535,000 Central costs of $195,000 are to be allocated in November. Requirements 1. Compute the central costs allocated to each store with budgeted sales as the cost-allocation base. 2. Compute the central costs allocated to each store with actual sales as the cost-allocation base. 3. What advantages are there to using budgeted rather than actual sales for allocating the central costs? Requirement 1. Compute the central costs allocated to each store with budgeted sales as the cost-allocation base. (Do not round interim calculations, and then round to the nearest whole dollar.) Irving Bainbridge Fitzwater
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