Coastal Computer operates two retail outlets in Oakview, one on Main Street and the other in Lakeland Mall. The stores share the use of a central accounting department. The cost of the accounting department for last year was $180,000. Following are the operating results for the two stores for the year.

Required
a. Allocate the cost of the central accounting department to the two stores based on:
(1) Number of computers sold.
(2) Store revenue.
b. Draw a cost flow diagram to illustrate your answer to requirement (a), part(2).

Transcribed Image Text:

Main Street Lakeland Mall Hevenues $1,000,000 2,000,000 Number of computers sold 2,000 1,600