Pawsh operates a pet supply superstore in Atlanta with three main product Store manager Jordan Baxter gathers the following information regarding lines: food, toys, and accessories Pawsh allocates common selling, the three product lines: general, and administration (SGBA) costs to each product line using the Click the icon to view the product line Information) cost of merchandise of each product line. Department manager salaries While considered SG&A, are direct and are assigned directly to each For 2020, Pawsh budgets the following selling. general, and product line. The company wants to optimize the pricing and cost administration costs: management of each product line and is wondering whether its accounting 1. Click the icon to view the selling general, and administration costs.) system is providing it with the best Information for making such decisions Read the requirements TOLM SUA ZIUU In this step, prepare an income statement for Pawah, by product line and in total, allocating common SGBA expenses using cost of merchandise. In the following step calculate the profit per square foot of store space for each product line. (Use parentheses or a minus sign to enter losses. Round the profit (lon) por square foot to the nonrest cont. $X.XX.) Pawsh Budgeted Income Statement For the Year Ended December 31, 2020 Food Toys Accessories Total Rovanos 3060000 2295000 2295000 7650000 Cost of merchandise Gross margin Selling general, & administrative costs Operating incomo (los) Square foot of store space Profit (los) per square foot Requirement 2. Identity an improved method for allocating costs to the three product lines. Explain. Use the method for allocating SGSA costs that you propose to prepare new product-line income statements Calculate the profit per square foot of store space for each product line. Compare your results to the results in requirement 1. Pawsh operates a pet supply superstore in Atlanta with three main product lines: food, toys, and accessories. Pawsh allocates common selling, general, and administration (SG&A) costs to each product line using the cost of merchandise of each product line. Department manager salaries, while considered SG&A, are direct and are assigned directly to each product line. The company wants to optimize the pricing and cost management of each product line and is wondering whether its accounting system is providing it with the best information for making such decisions. Store manager Jordan Baxter gathers the following information regarding the three product lines (Click the icon to view the product line information) For 2020, Pawsh budgets the following selling, general, and Click the icon to view the selling general, and administration costs. Read the regulrements administration costs: Square foot of store space Profit (loss) per square foot Requirement 2. Identity an improved method for allocating costs to the three product lines, Explain. Use the method for allocating SG&A costs that you propose to prepare new product-line income statements. Calculate the profit per square foot of store space for each product line. Compare your results to the results in requirement 1 An improved method for allocating costs to the three product lines is This method is more appropriate because of the n for the use of each cost driver (Use revenue Begin by Identifying the most appropriate cost driver for each cost ca dollars as the cost driver if the expense is not tied to any of the other Expense Cost driver Purchasing department expense Receiving department expense Seling expense activity based costing broad costing lon process costing simple costing Rent Store manager's salary Utilities Calculate the each of the cost driver rates need to allocate common SG&A costs under the method you have identified for this requirement. (Round all dollar amounts to the nearest cent, SXXX. Enter any rates as a percentage to two decimal places, X.XX) Pawsh operates a pet supply superstore in Atlanta with three main product lines, food, toys, and accessories Pawsh allocates common selling general, and administration (SG&A) costs to each product line using the cost of merchandise of each product line, Department manager salaries, while considered SG&A are direct and are assigned directly to each product line. The company wants to optimize the pricing and cost management of each product line and is wondering whether its accounting system is providing it with the best information for making such decisions Store manager Jordan Baxter gathers the following information regarding the three product lines: Click the icon to view the product line information.) For 2020, Pawsh budgets the following selling general, and administration costs: (Click the icon to view the selling general, and administration costs.) Read the requirements Square feet of store space Profit (los) per square foot Requirement 2. Identify an improved method for allocating costs to the three product lines. Explain. Use the method for allocating SG&A costs that you propose to propare new product line income statements. Calculate the profit per square foot of store space for each product line. Compare your results to the results in requirement 1. An improved method for allocating costs to the three product lines is This method is more appropriate because of the egory. Select the best explanation for the use of each cost driver. (Use revenue post drivers.) large dollar value of direct costs Explanation large dollar value of revenues small amount of square footage of rental space variety of products and large dollar value of indirect costs Utilities Calculate the each of the cost driver rates need to allocate common SG&A costs under the method you have identified for this requirement. (Round all dollar amount to the nearest cent, $XXX. Enter any raton as a percentage to two decimal places, XXX) Cost driver rate general, and administration (SG&A) costs to each product line using the cost of merchandise of each product line. Department manager salaries, while considered SG&A, are direct and are assigned directly to each (Click the icon to view the product line information.) For 2020, Pawsh budgets the following selling, general and Begin by identifying the most appropriate cost driver for each cost category Select the best explanation for the use of each cost driver. (Use revenue dollars as the cost driver if the expense is not tied to any of the other cost drivers.) Expense Cost driver Explanation Purchasing department exponse Receiving department expense Selling expense Rent Store manager's salary Utilities lound all Departments that sell more merchandise benefit more from this expense. This department expense Increases with the number of boxes received. This department expense increases with the number of labor dollars spent. This department expense increases with the number of purchase orders issued. This department exponse increases with the number of revenue dollars received This expense is not necessarily tied to any of the other cost drivers: therefore, cost of merchandise is selected This expense is related to the number of square feet occupied. common location Submit Pawsh operates a pet supply superstore in Atlanta with three main product lines: food, toys, and accessories. Pawsh allocates common selling, general, and administration (SG&A) costs to each product line using the cost of merchandise of each product line. Department manager salaries, while considered SG&A, are direct and are assigned directly to each Store mana the three pr (Click tt For 2020, P Begin by identifying the most appropriate cost driver for each cost category. Select the best dollars as the cost driver if the expense is not tied to any of the other cost drivers.) Cost driver Expense Purchasing department expense Receiving department expense Selling expense Rent Store manager's salary Utilities Calculate the each of the cost drive dollar amounts to the nearest cent, osts under them o two decimal pl Labor dollars = 11 11 Purchasing Number of boxes received Receiving Selling Number of purchase orders Rent Revenue dollars Store manager's salary [ Utilities Square feet of store space [ Start by determining the total selling, general, and administrative (SG&A) expenses allocated t SG&A expenses using the cost drivers you identified above. (Use the cost driver rate amounts computations, Round all amounts you enter into the table below to the nearest whole dollar, = while considered SG&A, are direct and are assigned directly to each - Calculate the each of the cost driver rates need to allocate common SGSA costs under the method you have identified for this requirement. (Roundati dollar amounts to the nearest cont. $XXX Enter any rates as a percentage to two decimal places, X.XX.) Cost driver rate Purchasing Receiving Selling Rent Store manager's salary Utilities Start by determining the total selling, general, and administrative (SG&A) expenses allocated to each department and in total when allocating common SG&A expenses using the cost drivers you identified above. (Use the cost driver rate amounts you determined in the preceding step for your allocation computations. Round all amounts you enter into the table below to the nearest whole dollar) Food Toys Accessories Total Direct SG&A costa: Department manager salaries Common SG&A costs allocated: Purchasing department expense Receiving department expenses Selling expense Rent Store manager's salary Utilities CI Total SGSA TOASOA In this stop, prepare an income statement for Pawsh, by product line and in total, allocating common SG&A expenses using the method you proposed in this requirement in the following step calculate the profit per square foot of store space for each product line. (Use parentheses or a minus sign to enter losses. Round the profit (loss) per square foot to the nearest cent, SX.XX.) Pawah Budgeted Income Statement For the Year Ended December 31, 2020 Food Toys Accessories Total Revenues Cost of merchandise Gross margin Seling, general, & administrative costs Operating income (105) Square feet of store space Profit (108) per square foot Compare your results to the results in requirement 1 on a profitloss por square foot basis. Roviow the income statement from requirement 1 Comparing the product line incomo statements in requirements 1 and 2, it appears that Vis/are more profitable por square foot and is/are loss profitable per square foot under the system used in requirement 2 compared to the simple system. These results are The reason is that the departments USO Nsh operates a pet supply superstar es: food, toys, and accessories, Pawsh allocates common selling, geral, and administration (SG&A) costs to each product line using the stof merchandise of each product line. Department manager salaries, ale considered SG&A, are direct and are assigned directly to each duct line. The company wants to ontimize the pricing and cost nagement dom is no Utilities Data Table the three product lines: (Click the icon to view the product line information.) For 2020, Pawsh budgets the following selling, general, and administration costs: ation cos tal SG&A Pawsh proposed ign to ent this step s requiren SBS Rour Product-Line Information for the Year Ended December 31, 2020 Food Toys Accessories Total Revenues S 3,060,000 $ 2.295,000 $ 2.295,000 $ 7,650,000 Cost of merchandise $ 1,800,000 $1,350,000 $ 1,350,000 $ 4,500,000 Salary of department manager $ 44,000 $ 70,000 $ 54,000 $ 168,000 Number of purchase orders placed 640 960 1,600 3,200 Number of boxes received 1,840 920 6,440 9,200 Square feet of store space 11.900 2,900 5,000 19,800 evenues Ost of merd ross marg elling, gend perating in Quare feet Print Done rofit (loss) compare yol superstore in Atlanta with three main product ories. Pawsh allocates common selling, SG&A) costs to each product line using the product line. Department manager salaries, direct and are assigned directly to each ants toontimize the pricing and.coet line hes Data Table Store manager the three product lines: (Click the icon to view the product line infor For 2020, Pawsh budgets the following selling, g administration costs: Jeneral, a Pawsh sing the ne sta ving & Intheses SG&A Costs =) per for the Year Ended December 31, 2020 Purchasing department expense $ Receiving department expense Selling expense 217,600 211,600 765,000 Rent 514,800 Store manager's salary 229,500 55,440 Utilities $ 1,993,940 Total Fative Print Done result int from requirement 1. income statements in requirements 1 and 2, it appears that is/are more pro