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 Foods $129,000 111,000 Baked Goods $102,000 75,000 Fresh Produce $170,000 118,000 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) Order processing (number of purchase orders) Receiving (number of deliveries) Shelf-stocking number of hours per delivery) Customer support (total units sold) Frozen Foods 15 8 3 32,000 Baked Goods 44 55 0.3 35,000 Fresh Produce 105 127 5 70,000 The controller estimates activity-cost rates for each activity as follows: Order processing Receiving Shelf-stocking Customer support $ 82 per purchase order 109 per delivery 13.00 per hour 0.26 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. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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. 0.2134 should be entered as 21.34%).) Sales Cost of goods sold Gross margin Store support Operating income (loss) Operating margin (loss) Frozen Food $ 129,000 111,000 $ 18,000 25,800 $ (7,800) (43.33) % $ Baked Goods 102,000 75,000 27,000 20,400 6,600 24.44 % % Fresh Produce $ 170,000 118,000 $ 52,000 34,000 $ 18,000 34.62 X % $ 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%). Round all other answers to nearest whole dollar.) Frozen Food Baked Goods Fresh Produce $ 0 Sales Cost of goods sold Gross margin Store support: Order processing Receiving Shelf-stocking Customer support 0 0 0 Total store support cost Operating income (loss) Operating margin (loss) % % %