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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

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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 $ 0.20 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: Particulars Pastry and Dairy Products Meat cakes Products Fundamentals Revenue 57000 63000 52000 Cost of Goods sold 38000 47000 35000 Store support 11400 14100 10500 Activities (Cost allocation base) . Ordering (purchasing order) 30 25 13 Delivery (Deliveries) 98 36 28 Shelf-stocking (hours) 183 166 24 . Customer support (item sold) 15500 20500 7900 Under its simple costing system, AM allocated support costs to products at the rate of 30% of cost of goods sold

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