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3 Fitzgerald Supermarkets (FS) operates at capacity and decides to apply ABC analysis to three product lines: baked goods, milk and fruit juice, and frozen
3 Fitzgerald Supermarkets (FS) operates at capacity and decides to apply ABC analysis to three product lines: baked goods, milk and fruit juice, and frozen foods. It identifies four activities and their activity cost rates as follows: 4 5 6 Ordering $93 per purchase order 7 Delivery and receipt of merchandise $74 per delivery 8 Shelf-stocking $20 per hour 9 Customer support and assistance $0.12 per item sold 0 The revenues, cost of goods sold, store support costs, activities that account for the store support costs, and activity-area usage of the three product lines can be found on the "PRODUCTLINEINFO" tab. 1 -2. The revenues, cost of goods sold, store support costs, activities that account for the store support costs, and activity-area _3 usage of the three product lines are as follows: -4 5 Baked Goods Milk and Fruit Juice Frozen Products 26 Financial data -7 Revenues $59,000 $67,000 $50,000 8 Cost of goods sold $40,000 $52,000 $31,500 9 Store support ? ? ? 20 Activity-area usage (cost-allocation base) -1 Ordering (purchase orders) 42 25 13 -2 Delivery (deliveries) 115 62 35 -3 Shelf-stocking (hours) 165 155 18 -4 Customer support (items sold) 15,000 21,000 7,800 -5 6 Under its simple costing system, FS allocated support costs to products at the following percentage of cost of goods sold. 27 TOTAL $176,000 $123,500 $35,144 80 212 338 43,800 28.5% 29 30 1. Use the simple costing system to prepare a product-line profitability report for FS. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions or Productlineinfo tabs 31 you will be marked wrong.) 32 33 Baked Goods Milk and Fruit Juice Frozen Products Total 34 Revenues 35 Costs 36 Cost of goods sold 37 Store support 38 Total costs 39 Operating income 40 Operating income/Revenues percentage 1 42 2. Use the ABC system to prepare a product-line profitability report for FS. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions or Productlineinfo tabs 73 you will be marked wrong.) 44 75 Baked Goods Milk and Fruit Juice Frozen Products Total 46 Revenues 47 Costs 48 Cost of goods sold 49 Ordering 50 Delivery 51 Shelf-stocking 52 Customer support 53 Total costs 54 Operating income 55 Operating income/Revenues percentage 56 57 58
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