Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Family 99 Supermarkets has decided to increase the size of its store. It wants information about the profitability of individual product lines: soft drinks, fresh
Family 99 Supermarkets has decided to increase the size of its store. It wants information about the profitability of individual product lines: soft drinks, fresh produce, and packaged food. FS99 provides the following data for 2020for each product line: Soft Drinks Fresh Products Packaged Food Revenues (RM) 300,000 850,000 480,000 Cost of goods sold (RM) 240,000 600,000 360,000 Cost of bottles returned (RM) 6,000 3,000 3,000 Number of purchase orders placed 140 330 140 Number of deliveries received 120 850 250 Hours of shelf-stocking time 200 2,500 1,300 Items sold 50,000 450,000 150,000 Activity Description of Activity Total Support Costs RM12,000 Bottle returns Returning of empty bottles to store Cost-Allocation Base Charge straight to product 610 purchase orders 1,220 deliveries Ordering Placing of orders for purchases RM 61,000 RM122,00 RM 70,000 Delivery Physical delivery and receipt of merchandise Shelf-stocking Stocking of merchandise on store shelves and ongoing restocking Customer Assistance provided to customers, support including checkout and bagging Total 4,000 hours of shelf stocking 650,000 items sold RM125,000 390,000 Family 99 Supermarkets currently allocates store support costs (all costs other than cost of goods sold) to product lines on the basis of cost of goods sold of each product line. Calculate the operating income and operating income as a percentage of revenues for each product line. Soft Drinks Fresh Products Packaged Foods Revenues Cost of goods sold Store support cost (equal to each) Total costs Operating income Operating income +Revenues
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