Data tableA single cost pool consists of resources needed to perform receiving, storing, picking, packing, shipping, order processing, and customer service activities. The annual cost of these resources is $\backslash (\backslash$$ $1,413,500\backslash ).$ The cost$-$allocation base used to allocate this pool to the two product groups is pounds of product sold. Brook Cities Sports $($BCS$)$ is a distributor of sports footwear and equipment.

$($Click the icon to view product and customer type information.$)$

$($Click the icon to view the cost and operating data.$)$

Read the requirements.

Requirement $1.$ Prepare a schedule that shows the gross margin of each product group.

Requirement $2.$ Prepare a schedule that shows the gross margin of each customer type. $($Round gross margin per case amounts to the nearest cent.$)$

Requirement $3.$ Based on your answers to numbers $1$ and $2,$ recommend a strategy to improve customer profitability.

The gross margin per case of is larger so more emphasis should be placed on

sales, especially at

stores.

equipment

footwear miles traveled.$)$ The actual monthly costs of the service department are allocated using ton$-$miles operated as the cost$-$allocation base.

Read the requirements. three decimal places.$)$ would be allocated to South and East on an actual ton$-$mile basis. Note that the total costs will be lower. $($Round rates to three decimal places.$)$

Are the allocations justified? If not, what improvement do you suggest?

Such allocation seems because the operating departments to bear another department's cost of inefficiency.

If the allocations are unjustified, select an improvement:$=$

Select the two advantages of this method over other methods.The use of a predetermined unit rate for variable costs prevents the total charges from being affected by the efficiency of price changes of the service department.

The use of actual ton$-$miles for fixed costs prevents the total charges from being affected by the maximum capacity and not the actual usage.

The use of maximum capacity ton$-$miles for variable costs prevents the total charges from being affected by the efficiency of price changes of the service department. Data tableTotal Cost

Driver Unit