Family Supermarkets (FS) operates at capacity and decides to apply ABC analysis to three product lines: baked goods, milk and fruit juice, and frozen foods. It identifies four activities and their activity cost rates as follows: (Click the icon to view the activity cost rates.) The revenues, cost of goods sold, store support costs, activities that account for the store support costs, and activity-area usage of the three product lines are as follows: (Click the icon to view the information for the three product lines.) Requirement 1. Use the simple costing system to prepare a product-line profitability report for FS. (Round the percentages to the nearest hundredth percent, X.XX\%.) Requirement 2. Use the ABC system to prepare a product-line profitability report for FS. (Round the percentages to the nearest hundredth percent, X.XX% \%.) Requirement 3 . What new insights does the ABC system in requirement 2[ provide to FS managers? The line drops sizably in profitability when ABC is used. The product line uses more resources in each activity area. In contrast, used less of the total resources in each activity area. Hence, under ABC, is much more profitable. Family Supermarkets may want to explore price increases on Information for the three product lines Under is simpie cosung system, ro anucated suppoil cosis to producis at ine rate or 30% of cost of goods sold Requirements 1. Use the simple costing system to prepare a product-line profitability report for FS. 2. Use the ABC system to prepare a product-line profitability report for FS. 3. What new insights does the ABC system in requirement 2 provide to FS managers? Family Supermarkets (FS) operates at capacity and decides to apply ABC analysis to three product lines: baked goods, milk and fruit juice, and frozen foods. It identifies four activities and their activity cost rates as follows: (Click the icon to view the activity cost rates.) The revenues, cost of goods sold, store support costs, activities that account for the store support costs, and activity-area usage of the three product lines are as follows: (Click the icon to view the information for the three product lines.) Requirement 1. Use the simple costing system to prepare a product-line profitability report for FS. (Round the percentages to the nearest hundredth percent, X.XX\%.) Requirement 2. Use the ABC system to prepare a product-line profitability report for FS. (Round the percentages to the nearest hundredth percent, X.XX% \%.) Requirement 3 . What new insights does the ABC system in requirement 2[ provide to FS managers? The line drops sizably in profitability when ABC is used. The product line uses more resources in each activity area. In contrast, used less of the total resources in each activity area. Hence, under ABC, is much more profitable. Family Supermarkets may want to explore price increases on Information for the three product lines Under is simpie cosung system, ro anucated suppoil cosis to producis at ine rate or 30% of cost of goods sold Requirements 1. Use the simple costing system to prepare a product-line profitability report for FS. 2. Use the ABC system to prepare a product-line profitability report for FS. 3. What new insights does the ABC system in requirement 2 provide to FS managers
