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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 of SFS discontinues frozen foods. The operating results from the most recent period are: Sales Cost of goods sold Frozen Foods Baked Goods Fresh Produce $ 164,000 $ 198,000 $ 262,000 150,000 160,000 200,000 SFS estimates that store support expenses, in total, are approximately 15% 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 (cont driver) Order processing number of purchase orders) Receiving (number of deliveries) Shelf-stocking number of hours per delivery) Customer support (total units sold) Frozen Poods 11 12 6 20,000 Baked Goods 54 71 0.2 37.000 Fresh Produce 95 172 7 74,000 The controller estimates activity cost rates for each activity as follows: Order processing Receiving Shelf-stocking Customer support 5.82 102 16.00 0.18 per purchase order per delivery per hour 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.

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