part a.) Using BB's single-driver system to allocate its operating costs, how much was allocated to CD's in 2016? part b.) If BB had used an activity-based costing system to allocate its opearting costs in 2016, how much would have been allocated to the cafe? For cashiers and floor employee salaries, use number of items sold as the cost driver. For all other costs, the appropriate drivers should be clear.

Books and Brew (BB) is a large city bookstore that sells books and music CD's, and also has a cafe. Currently, BB uses a single-driver system to allocate its operating costs to each of its three product lines, using the cost of merchandise as the single cost driver. But BB's management is concerned that this allocation system may not be providing the best information for making a variety of pricing decisions. BB's operating costs for 2016 were as follows: Purchasing department Recelving department Shelf-stocking employee salaries Cashiers and floor employee salaries $500,000 $421,000 $481,000 $104,000 2016 information about BB's product lines is also available: Revenue Cost of merchandise Number of purchase orders placed Number of deliveries received Hours of shelf stocking time Number of items sold Books $3,873,000 $2,711,000 2,740 1,370 14,400 111,000 CD's $2,383,000 $1,880,000 2,470 1,560 13,700 103,000 Cafe $791,000 $535,000 1,880 1,660 11,500 269,000