Studemeir Paint & Floors (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 $193,700 127,000 Other Flooring Products $197,000 158,000 Carpet $218,000 149,000 Sales Cost of goods sold SPF estimates that store support 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 385 37 0.30 Carpet 133 175 6.0 Other Flooring Products 120 59 0.57 Harish estimates activity-cost rates for each activity as follows: Order processing Receiving Customer support $123 per purchase order 185 per delivery 24 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