) Statement showing Cost per unit Products (A and B based on Activity based Costing Method) Machine-hour rate (25,50,000/1,40,000 hours) 33.93 Cost of one setup (28,20,000/64 setups) 12,812.50 Cost of purchase order (26,18,000/544 orders) 1.136.03 j7 Particulars Products Product A Product B Total machine-hours 20,000.00 1.20,000.00 Cost related to volume activities *78,600.00 4.71.600.000 Cost related to purchases 21.81,764.80 34,36,235.52" Cost related to setups 2,56,250.00 *5.63.750.00" Total costs 5,16,614.80 14.71,585.52 Annual output (units) (+) 5,000.00 (+) 60,000.00 Cost per unit 2103.32 24.53 (20,000 hours x 13.93) **(1.20,000 hours x 23.93) "(160 orders x 71,136.03) **(384 orders x 21,136.03) 20 setups x 112,812.50) 54(44 set-ups 12,812.50) P.12.4 Family Store wants information about the profitability of individual product lines soft drinks fresh produce and packaged food. The store provides the following data for the current year for each product line: Soft drinks Fresh produce Packaged food Revenues 27,93,500 21,00,600 12,09,000 Cost of goods sold 6,00,000 15,00,000 9,00.000 Cost of bottles returned 12.000 0 0 Number of purchase orders placed 360 840 360 Number of deliveries received 300 2,190 660 Hours of shell-stocking time 5.400 2,700 Items sold 1,26,000 11.04,000 3.06,000 540 Family Store also provides the following information for the current year: Activity Description of activity Total cost Cost-allocation base Bottle returns Returning of empty bottles 312.000 Direct tracing of sott drink line Ordering Placing of orders for purchases 1,56,000 1,560 purchase orders Delivery Physical delivery and receipt of goods 2,52,000 3,150 deliveries Shelf-stocking Stocking of goods on store shelves and on-going restocking 1,72,800 8,640 hours of shelt-stocking time Customer Assistance provided to customers support including checkout 3,07,200 15,36,000 items sold REQUIRED: (1) Family Store currently allocates support cost (all costs other than cost of goods sold) to product lines on the basis of cost of goods sold of each product line. Calculate the operating income and operating income as a % of revenues for each product line. (i) If Family Store allocates support costs (other than cost of goods sold) to product lines using an activity-based costing system, calculate the operating in- come and operating income as a % of revenues fex each product line. (IT) Comment on your answers in requirements (1) and (11)