Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in the last few periods. Management believes that the store can improve its profitability if SFS discontinues frozen foods. The operating results from the most recent period are:

	Frozen Foods			Baked Goods			Fresh Produce
Sales	$	127,000		$	93,000		$	173,000
Cost of goods sold		110,000			68,000			121,000

SFS estimates that store support expenses, in total, are approximately 19% of revenues.

The controller says that not every sales dollar requires or uses the same amount of store support activities. A preliminary analysis reveals store support activities for these three product lines are:

Activity (cost driver)	Frozen Foods			Baked Goods			Fresh Produce
Order processing (number of purchase orders)		10			47			101
Receiving (number of deliveries)		10			51			126
Shelf-stocking (number of hours per delivery)		4			0.4			4
Customer support (total units sold)		20,000			32,000			64,000

The controller estimates activity-cost rates for each activity as follows:

Order processing	$	78	per purchase order
Receiving		110	per delivery
Shelf-stocking		14.00	per hour
Customer support		0.30	per item

Required:

1. Prepare a product-line profitability report for SFS under the current costing system.

2. Prepare a product-line profitability report for SFS using the ABC information the controller provides.

With explanation, please