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PLEASE HELP ME WITH THIS PROBLEM. THANK YOU Studemetr Paint & Floors (SPF) is a retail store specializing in home Improvement. The store has experienced
PLEASE HELP ME WITH THIS PROBLEM. THANK YOU
Studemetr Paint & Floors (SPF) is a retail store specializing in home Improvement. The store has experienced net operating losses ir Other Flooring Products line during the last few periods. SPF's management team thinks that the store will improve its profitability if stops carrying the Other Flooring Products line. The operating results from the most recent period are: Paint and Paint Supplies $ 174,180 188,888 Other Flooring Products $ 216, eee 172, eee Carpet $ 280,000 195,000 Sales Cost of goods sold SPF estimates that store operating expenses are approximately 25% of revenues. Harish Rana, SPF's controller, states that while every sale has one purchase order, not every sales dollar requires or uses the same amount of store support activities. He conducts a preliminary Investigation and his results and analysis are as follows: Activity (cost driver) Order processing number of purchase orders) Receiving (number of deliveries) Customer support (hours required per sale) Paint and Paint Supplies 250 38 9.30 Carpet 195 165 5. Other Flooring Products 113 60 0.75 Harish estimates activity-cost rates for each activity as follows: Order processing Receiving Customer support $ 179 198 20 per purchase order per delivery per hour Required: 1. Prepare a product-line profitability report for SPF under the current costing system. 2. Prepare a product-line profitability report for SPF using the ABC Information the controller provides. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a product-line profitability report for SPF under the current costing system. (Loss amounts should be indicated by a minus sign. Round operating margin (loss) to 2 decimal places (i.e. 0.2134 should be entered as 21.34%).) Carpet Other Flooring Paint & Paint Supplies Products Operating income (loss) Operating margin (loss) 96 % % Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a product-line profitability report for SPF using the ABC information the controller provides. (Loss amounts should be indicated by a minus sign. Round operating margin (loss) to 2 decimal places (i.e. 0.2134 should be entered as 21.34%). Round all other answers to nearest whole dollar.) Paint & Paint Other Flooring Carpet Supplies Products Store support: Total store support Operating income (loss) Operating margin (loss) %6 996 96Step by Step Solution
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