Johnny’s Markets has three grocery stores in the metropolitan Toronto area. Central costs are allocated using sales as the cost-allocation base. The following are budgeted and actual sales during November:

1. Compute the central costs allocated to each store with budgeted sales as the cost-allocation base.

2. Compute the central costs allocated to each store with actual sales as the cost-allocation base.

3. What advantages are there to using budgeted rather than actual sales for allocating the central costs?

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Kensington Lytton Swansea Budgeted sales $600,000 $1,000,000 $400,000 700,000 500,000 Actual sales 600,000