Henderson Supermarkets operates at capacityh and decides to apply ABC analysis to three product lines: baked goods, milk and fruit juice, and frozen foods. It identifies four activites and their activity cost rates as follows:

Ordering- $102 per purchase order

Delivery and receipt of merchandies- $78 per delivery

Shelf-stocking-$21 per hour

Customer support and assistance- $0.22 per item sold

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:

	Baked Goods	Milk and fruit juice	frozen products
financial data
Revenues	59500	66000	51000
cost of goods sold	36000	48000	34000
store support	10800	14400	10200
activity area usage(cost allocation base)
ordering(purchase order)	25	20	15
delivery(deliveries)	90	35	30
shelf-stocking(hours)	190	180	40

customer support 13500 17500 8000

1. Use the simple costing system to prepate a product-line profitability report.

2.use the abc system to prepate a product-line profitability report.

3. what new insights does the abc system in requirement 2 provide to management?