Homework: Chapter 5: Activity-Based Costing and Acti... Question 2, E5-27 (simila... Part 1 of 3 HW Score: 0%, 0 of 4 points O Points: 0 of 1 Gabriel Supermarkets (GS) 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.) Read the requirements. Requirement 1. Use the simple costing system to prepare a product-line profitability report for GS. (Round the percentages to the nearest hundredth percent, X.XX%.) Milk and Frozen Baked Goods Fruit Juice Products Total Revenues Costs Cost of goods sold Data Table Store support Total costs Operating income Operating Income/Revenues % % % % More Info Baked Milk and Frozen Goods Fruit Juice Products Financial data Revenues $ 59,500 $ 65,500 $ 50,500 Cost of goods sold $ 38,000 $ 47,000 $ 35,000 Store support $ 11,400 $ 14,100 $ 10.500 Activity-area usage (cost-allocation base) Ordering (purchase orders) 30 25 13 Delivery (deliveries) 98 36 28 Shelf-stocking (hours) 183 166 24 Customer support (items sold) 15,500 20,500 7,900 Under its simple costing system, GS allocated support costs to products at the rate of 30% of cost of goods sold. Ordering Delivery and receipt of merchandise Shelf-stocking Customer support and assistance $100 per purchase order $80 per delivery $20 per hour $0.20 per item sold Requirements 1. Use the simple costing system to prepare a product-line profitability report for GS. 2. Use the ABC system to prepare a product-line profitability report for GS. 3. What new insights does the ABC system in requirement 2 provide to GS managers? Print Done