2 2 points Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in the last few periods. Management believes that the store can improve its profitability if SFS discontinues frozen foods. The operating results from the most recent period are: Sales Cost of goods sold Frozen Foods $ 148,000 128,000 Baked Goods Fresh Produce $ 142,000 104,000 $ 211,000 153,000 SFS estimates that store support expenses, in total, are approximately 14% of revenues. The controller says that not every sales dollar requires or uses the same amount of store support activities. A preliminary analysis reveals store support activities for these three product lines are: Frozen Baked Fresh Activity (cost driver) Foods Goods Order processing (number of purchase orders) Receiving (number of deliveries) 10 11 49 73 Produce 93 146 Shelf-stocking (number of hours per delivery) Customer support (total units sold) 5 22,000 0.5 34,000 6 68,000 The controller estimates activity-cost rates for each activity as follows: Order processing $ 83 Receiving per purchase order 106 per delivery Shelf-stocking 12.00 per hour Customer support 0.21 per item Required: 1. Prepare a product-line profitability report for SFS under the current costing system. 2. Prepare a product-line profitability report for SFS using the ABC information the controller provides. Answer is complete but not entirely correct.