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Unformatted text preview: Assignment 5 Due Date: May 2, 2011 11:59:00 PM CDT; 12-24, 13-38 12-24, p551 Sales-based allocations Johnny’s Markets has three grocery stores in the metropolitan Philadelphia area. Central costs are allocated using sales as the cost driver. Following the budgeted and actual sales during November: . . Sunnyville Wedgewood Independence Budgeted sales $600,000 $1,000,000 $400,000 Actual sales 600,000 700,000 500,000 . Central costs of $200,000 are to be allocated in November. 1. Compute the central costs allocated to each store with budgeted sales as the cost driver. Allocation based on budgeted (forecast) sales: Sunnyville=$60,000; Wedgewood=$100,000; Independence=$40,000. 2. Compute the central costs allocated to each store with actual sales as the cost driver. Allocation based on actual sales (based on percentage of total sales of $1,800,000): Sunnyville=$66,667; Wedgewood=$77,778; Independence=$55,555 3. What advantages are there to using budgeted rather than actual sales for allocating the central costs?3....
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- Spring '11
- Johnny, actual sales, central costs