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	$ 132,000	$ 103,000	$ 182,000
Cost of goods sold	114,000	76,000	128,000

SFS estimates that store support expenses, in total, are approximately 21% 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)	8	48	101
Receiving (number of deliveries)	9	52	129
Shelf-stocking (number of hours per delivery)	5	0.4	9
Customer support (total units sold)	24,000	32,000	64,000

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

Order processing	$ 79	per purchase order
Receiving	109	per delivery
Shelf-stocking	14.00	per hour
Customer support	0.23	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.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2

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.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2

Prepare a product-line profitability report for SFS 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%). Roundall other answers to nearest whole dollar.)

• Required 1
• Required 2

Prepare a product-line profitability report for SFS under the current costing system. (Lossamounts 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%).)

	Frozen Food	Baked Goods	Fresh Produce
Operating income (loss)
Operating margin (loss)		%		%		%

	Frozen Food	Baked Goods	Fresh Produce
Store support:
Total store support cost
Operating income (loss)
Operating margin (loss)		%		%		%