Please do the questions including steps. Thanks for all the help.

5-42 Activity-based costing, activity-based management. merchandising. Main Street Books and Cef IMSBGI is a large city bookstore that sells hooks and music CDs and has a cafe. MSBC operates at capacity and allocates selling, general, and administration is, G 8: A) costs to each product line using the cost of merchandise of each product line. MSBC wants to optimize the pricing and cost management of each product line. M300 is wondering if its accounting system is providing it with the best information for melting such decisions. Main Street Books and care Product Li na lnforrnation For the Year Ended December 31, am Books SD: [late Revenues $3,720,400 $2,315,360 $736,216 Cost of merchandise ._ $2,056,727 $1,722,311 $556,005 Cost ofcaf cleaning _ $10,250 Number ot purchase orders placed 2,800 2,500 2,000 NWE receive , 1,700 1,500 Hours of shelf stocking time - 15.000 14,000 10,000 Items sold 124,010 115,768 300,100 Main Street Books and Cafe incurs the following selling, general, and administration costs: Main Street Books and 0an Selling. General, and Administration (S, G 8: A) Beets For the Year Ended December 31. 2014 Purchasing department expense . ' S 414,500 Receiving department expense 432,400 Shelf stocking labor expense 407,500 Customer support exp ense (cashiers and floor employees) 01,104 51,405,504 1. Suppose MSBC uses cost of merchandise to allocate all 8, 6 at A costs. Prepare product line and total company income statements. 2. Identify an improved method for allocating costs to the three product lines. Explain. Use the method for allocating S, [1' St A cost: that you propose to prepare new product line and total company income statements. Compare your results to the results in requirement 1. 3. Write a memo to MSBC management describing how the improved system might be useful for manag- ing the store