5-27 ABC, retail product-line profitability. Fitzgerald Supermarkets (FS) operates at capacity and de- cides 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 Ordering Delivery and receipt of merchandise Shelf-stocking Customer support and assistance $95 per purchase order $76 per delivery $19 per hour $ 0.15 per item sold 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 are as follows: Baked Goods Milk and Fruit Juice Frozen Products Financial data Revenues Cost of goods sold Store support $60,000 $41,000 $12,300 $66,500 $51,000 $15,300 $50,500 $32,000 S 9,600 Activity-area usage (cost-allocation base) Ordering (purchase orders) Delivery (deliveries) Shelf-stocking (hours) Customer support (items sold) 120 170 15,400 24 60 150 20,200 14 36 20 7,960 Under its simple costing system, FS allocated support costs to products at the rate of 30% of cost of goods sold. 1. Use the simple costing system to prepare a product-line profitability report for FS. 2. Use the ABC system to prepare a product-line profitability report for FS 3. What new insights does the ABC system in requirement 2 provide to FS managers