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 Supplies Other Flooring Carpet Products 133,000 $ 190,000 150,000 $ 441,500 $ 289,000 154,000 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) Paint and Paint Supplies 550 38 0.60 Order processing (number of purchase orders) Receiving (number of deliveries) Customer support (hours required per sale) Harish estimates activity-cost rates for each activity as follows: Order processing Receiving Customer support $150 per purchase order 180 per delivery 18 per hour Other Flooring Products Carpet. 148 160 120 67 9.0 0.65 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 (i.e. 0.2134 should be entered as 21.34%).) Paint & Paint Supplies Operating income (loss). Operating margin (loss) % 96