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	$	120,000		$	91,000		$	158,175
Cost of goods sold		105,000			67,000			110,000

SFS estimates that store support expenses, in total, are approximately 20% 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			45			100
Receiving (number of deliveries)		12			55			120
Shelf-stocking (number of hours per delivery)		2			0.5			4
Customer support (total units sold)		30,000			40,000			86,000

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

Order processing	$	80	per purchase order
Receiving		110	per delivery
Shelf-stocking		15.25	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.

Requirement 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 Goods		Fresh Produce
	$0		$0		$0
Operating income (loss)
Operating margin (loss)		%		%		%

Requirement 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. .2134 should be entered as 21.34%). Round your other answers to nearest whole dollar.)

	Frozen Food		Baked Goods		Fresh Produce
	$0		$0		$0
Store support:
Total store support cost	0		0		0
Operating income (loss)
Operating margin (loss)		%		%		%