Cost Allocation

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 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 2012 were as follows:

Purchasing department	$493,000
Receiving department	$449,000
Shelf-stocking employee salaries	$493,000
Cashiers and floor employee salaries	$147,000

2012 information about BB's product lines is also available:

	Books	CD's	Cafe
Revenue	$3,699,000	$2,218,000	$834,000
Cost of merchandise	$2,594,000	$1,653,000	$555,000
Number of purchase orders placed	2,730	2,540	2,000
Number of deliveries received	1,580	1,760	1,790
Hours of shelf stocking time	14,400	14,600	10,800
Number of items sold	114,000	114,000	362,000

1. Using BB's single-driver system to allocate its operating costs, how much was allocated to the cafe in 2012?

2. If BB had used an activity-based costing system to allocate its operating costs in 2012, how much would have been allocated to CD's? For cashiers and employee salaries, use number of items sold as the cost driver. For all other costs, the appropriate drivers should be clear.