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Books and Brew (BB) is a large city bookstore that sells books and music CD's, and also has a cafe. Prioe to this year, BB uses a single-driver system to allocate its operating costs to each of its three product lines, using the the number of items sold 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 2020 were as follows:

Purchasing department	$499,000
Receiving department	$403,000
Shelf-stocking employee salaries	$464,000
Cashiers and floor employee salaries	$108,000

	Books	CDs
Revenue	$3,140,000	$2,427,000	$822,000
Cost of merchandise	$2,900,000	$1,865,000	$535,000
Number of purchase orders placed	2,640	2,560	2,050
Number of deliveries received	1,290	1,520	1,440
Hours of shelf stocking time	15,300	13,500	10,500
Number of items sold	124,000	104,000	262,000

1. Using BB's traditional single-driver system to allocate its operating costs in 2020, how much would be allocated to Books?

2.If BB decided to use an activity-based costing system to allocate its opearting costs in 2020, 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 the other three cost categories, it should be clear what the appropriate drivers are.

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