This is a cost allocation problem for a merchandising firm. Since merchandising firms do not have overhead, you must allocate "operating costs" instead of "overhead costs." Also, the allocations in this problem are to a department, not to a product or job. Nonetheless, the allocation process is the same. Just follow the three steps used in the lectures: 1. Read the problem and question carefully to determine the cost driver. 2. Compute the "overhead" rate - budgeted operating costs / budgeted driver. 3. Allocate to the specific department - overhead rate X driver for the specific department. Remember that with activity-based costing (Part B), there is more than one driver and more than one rate, and the allocation to a department is the sum of several individual allocations. Each part of the problem is worth five points, and you get six tries per part. Books and Brew (BB) is a large city bookstore that sells books and music CDs, and also has a cafe. Prior to this year, BB used a single-driver system to allocate its operating costs to each of its three product lines, with the number of items sold as the single cost driver. But BB's management was concerned that this allocation system was not providing the best information for making its many pricing decisions. BB's budgeted operating costs for 2021 were as follows: $491,000 Purchasing department Receiving department $412,000 Shelf-stocking employee salaries $461,000 Cashiers and floor employee salaries $125,000 The following is budgeted 2021 information for BB's three product lines: Books CDs Cafe Revenue $3,808,000 $2,220,000 $783,000 $535,000 Cost of merchandise $2,758,000 $1,553,000 Number of purchase orders placed 2,630 2,410 2,030 Number of deliveries received 1,200 1,600 1,490 Hours of shelf stocking time 15,700 13,000 11,500 Number of items sold 117,000 119,000 263,000 REQUIRED (ROUND ALLOCATION RATES TO TWO DECIMAL PLACES.] Part A [6 tries; 5 points] Using BB's traditional single-driver system to allocate its operating costs in 2021, how much would be allocated to the cafe? Submit Anwar