A Local Department Store Has Budgeted for 100 Eight-Hour Retail

question 27

Short Answer

A local department store has budgeted for 100 eight-hour retail shifts to be staffed every week. The
number of shifts staffed on a single day of the week is apportioned based on the total number of
shoppers who visit the store during the day. The following table shows the average daily number of
shoppers over a two month period.

What is the standard divisor for this apportionment problem?

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Definitions:

Activity-Based Costing

A method of accounting that assigns costs to products based on the activities they require.

Overhead Applied

The allocation of overhead costs to specific products or cost centers based on a predetermined rate or method.

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities they require, aiming to provide more accurate insights into what drives costs and profitability.

Unit Product Cost

The total cost, both fixed and variable, associated with creating a single unit of a product.