Required 1 and 2 please help!
Studemeir Paint & Hoors (SPF) has experienced net operating losses in its Other Flooring Products line during the last few periods. SPF's management team thinks that the store will improve its profitability if it discontinues the Other Flooring Products line. The operating results from the most recent period are: Paint and Paint Supplies $278,600 154,000 Sales Cost of goods sold Carpet $261,000 183,000 Other Flooring Products $191,000 150,000 SPF estimates that store support expenses are approximately 24% 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: Paint and Other Paint Flooring Activity (cost driver) Supplies Carpet Products Order processing (number of purchase orders) 410 185 116 Receiving (number of deliveries) 37 155 60 Customer support (hours required per sale) 0.50 6.0 0.70 Harish estimates activity-cost rates for each activity as follows: Order processing Receiving Customer support $140 per purchase order 190 per delivery 20 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 Order processing Receiving Customer support $140 per purchase order 190 per delivery 20 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 (ie. 0.2134 should be entered as 21.34%).) Paint & Paint Supplies Carpet Other Flooring Products Operating income (loss) Operating margin (los) % Required 2 > 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 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 Supplies Carpet Other Flooring Products Store support: Total store support Operating income (loss) Operating margin (loss) % 96
