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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

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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 Sales Cost of goods sold Frozen Food Baked Goods Fresh Produce $ 125,000 $94,000 $166,000 08,000 69,000 15,000 SFS estimates that store support expenses in total, are approximately 18% of revenues activities. A preliminary analysis reveals store support activities for these three product lines are The controller says that not every sales dollar requires or uses the same amount of store support Frozen Food Baked Goods Fresh Produce Activity (cost driver) Order processing (number of purchase orders) Receiving (number of deliveries) Shelf-stocking (number of hours per delivery) Customer support (total units sold) 41 53 0.3 33,000 13 10 120 37,000 66,000 The controller estimates activity-cost rates for each activity as follows S Order processing Receiving Shelf-stocking Customer support 80 per purchase order 110 per delivery 16.00 per hour 0.11 per item Required: 1. Prepare a product-line profitability report for SFS under the current costing system (Loss amounts should be indicated by a minus sign. Round operating margin (loss) to 2 decimal places (i.e. .2134 should be entered as 21.34%).) Frozen Food Baked G $ 125,000 Fresh P 94,000 S 166,000 Type here to search 0i

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