Exercise 5-33 (Algo) Product Line Profitability Analysis [LO 5-3, 5-5] Studemeir Paint & Floors (SPF) is a retail store specializing in home improvement. The store has experienced net operating losses in its Other Flooring Products line during the last few periods. SPF's management team thinks that the store will improve its profitability if it stops carrying the Other Flooring Products line. The operating results from the most recent period are: Sales Cost of goods sold Paint and Paint Other Flooring Supplies Carpet Products: $334,300 $ 230,000 $186,900 179,000 166,000 149,250 SPF estimates that store operating expenses are approximately 24% of revenues. Harish Rana, SPF's controller, states that while every sale has one purchase order, not every sales dollar requires or uses the same amount of store support activities. He conducts a preliminary investigation and his results and analysis are as follows: Activity (cost driver) Order processing (number of purchase orders) Receiving (number of deliveries) Customer support (hours required per sale) Paint and Paint Supplies 438 57 0.30 Harish estimates activity-cost rates for each activity as follows: Order processing Receiving Customer support Required: $ 153 per purchase order 191 per delivery 33 per hour Carpet Other Flooring Products 120 115 110 77 6.0 8.69 ces Required: 1. Prepare a product-line profitability report for SPF under the current costing system. 2. Prepare a product-line profitability report for SPF using the ABC information the controller provides. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a product-line profitability report for SPF under the current costing system. (Loss amounts should be indicated by a minus sign. Round operating margin (loss) to 2 decimal places (ie. 0.2134 should be entered as 21.34%).) Operating income (loss)) Operating margin (loss) Paint & Paint Supplies Carpet Other Flooring Products $ $ 0 $ 0 % Required 1 % Required 2 > % < Prev 2 of 4 Next > Required 1 Required 2 Prepare a product-line profitability report for SPF using the ABC information the controller provides. (Loss amounts should be indicated by a minus sign. Round operating margin (loss) to 2 decimal places (i.e. 0.2134 should be entered as 21.34%). Round all other answers to nearest whole dollar.) Paint & Paint Supplies Carpet Other Flooring Products $ 0 $ 0 $ 0 s Store support 0 0 Total store support Operating income (loss) Operating margin (loss) %