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Family Supermarkets has decided to increase the size of its Lansing store. It wants information about the profitability of its individual product lines: meats, fresh

Family Supermarkets has decided to increase the size of its Lansing store. It wants information about the profitability of its individual product lines: meats, fresh produce, and packaged food. The following data is for 2019 for each product line:

Meats Fresh Produce Packaged Goods
Revenue $785,000 $835,000 $470,000
Cost of Goods Sold $585,000 $595,000 $350,000
Purchase Orders 240 346 133
Hours of Stocking Shelves 219 2,277 1,002
Items Sold 300,000 438,000 137,000

The Company Also Provides the following information for 2019 for its three support activities:

Support Activity Budgets Cost Cost Driver
Ordering $119,000 purchase orders
Shelf stocking $61,000 hours of stocking shelves
Customer support $188,000 items sold

Part 1)Family Supermarkets currently uses a single-driver system to allocate period costs to its product lines. The single driver that is used is the Cost of Goods Sold for each product line. Using this system, compute the allocation to Fresh Produce.

Part 2) If Family Supermarkets instead used an activity-based costing system to allocate period costs, with the cost pools and cost drivers listed in the tables above, how much would be allocated to Packaged Foods?

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