Answered step by step
Verified Expert Solution
Question
1 Approved Answer
b. Genie Corner Stores operates aleancity and decides to apply ABC analysis to three product lines: baked goods. milk and fruit juice and frozen foods.
b. Genie Corner Stores operates aleancity and decides to apply ABC analysis to three product lines: baked goods. milk and fruit juice and frozen foods. Total store and supporting costs (indirect/overhead costs) are $37,760. These indirect/overhead costs are identified in the following activities (cost pools) and their respective cost drivers Activity Total cost Cost driver Ordering Delivery Shelf-stocking Customer support Total $ 7.890 $ 17, 445 $ 5.640 $6785 $37, 760 Number of purchase orders Number of deliveries Number of hours Number of items sold Baked goods Milk and fruit juice Frozen products Financial data Revenues Cost of goods sold $65,000 $26, 000 $67, 500 $30,375 $41, 250 $33,000 Cost Driver Purchase orders Deliveries Shelf-stocking hours Items sold 27 66 35 42 17 125 175 15.400 165 80 20, 200 7 ,960 Required: Use the ABC system to prepare a product-line profitability report for Genie. Comment on the results. (3 + 12 - 15 Marks) Page 6 of 9
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started