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 $ 148,000 $ 142,000 $ 211,000 Cost of goods sold 128,000 104,000 153,000 SFS estimates that store support expenses, in total, are approximately 14% 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 49 93 Receiving (number of deliveries) 11 73 146 Shelf-stocking (number of hours per delivery) 5 0.5 6 Customer support (total units sold) 22,000 34,000 68,000 The controller estimates activity-cost rates for each activity as follows: Order processing $ 83 per purchase order Receiving 106 per delivery Shelf-stocking

12.00 per hour Customer support 0.21 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.