Australian Mart (AM) operates at capacity and decides to apply ABC analysis to three product lines: pastry and cakes, Dairy Products, and meat products. It identifies four activities and their activity cost rates as follows:

Ordering $100 per purchase order

Delivery and receipt of merchandise $ 80 per delivery

Shelf-stocking $ 20 per hour

Customer support and assistance $ 0.30 per item sold

The revenues, cost of goods sold, store support costs, the activities that account for the store support costs, and activity-area usage of the three product lines are as follows:

particular	pastry and cakes	dairy products	meats products
fundamental
revenue	65,000	50,000	60,000
cost of goods sold	35,000	45,000	45,000
store support	11,000	15,100	10,500
activities (cost allowance base)
ordering (purchases order)	30	25	13
delivery (deliveries)	98	36	28
shelf-stocking (hours)	183	166	24
customer support (item sold)	15,500	20,500	7,900

Under its simple costing system, AM allocated support costs to products at the rate of 30% of cost of goods sold.

requirement

• Use the simple/traditional costing system to prepare a product-line profitability report for AM.
• "ABC system motivates sustainability and better decision making in organization" would you agree? Justify (500 words; minimum five references).