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: Sales Cost of goods sold Paint & Paint Supplies Carpet $431,400 $261,000 132,000 155,000 Other Flooring Products $196,000 161,000 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: Paint & Paint Supplies 490 Activity (cost driver) Order processing (number of purchase orders) Receiving (number of deliveries) Customer support (hours required per sale) Carpet 210 190 6.0 Other Flooring Products 120 57 0.80 37 0.40 Harish estimates activity-cost rates for each activity as follows: Order processing Receiving Customer support $150 per purchase order 185 per delivery 30 per hour