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 $120,000 105,000 Baked Goods $91,000 67,000 Fresh Produce $158, 175 110,000 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: Baked Goods Fresh Produce Frozen Foods 10 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) 45 55 100 120 12 2 0.5 40,000 30,000 4 86,000 The controller estimates activity-cost rates for each activity as follows: Order processing Receiving Shelf-stocking Customer support $ 80 per purchase order 110 per delivery 15.25 per hour 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. 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. .2134 should be entered as 21.34%).) Frozen Food Baked Goods $ 91,000 Sales $ 120,000 Fresh Produce $ 158,175 110,000 $ 48, 175 105,000 15,000 67,000 24,000 $ $ Cost of goods sold Gross margin Store support Operating income (loss) Operating margin (loss) % % % Required 1 Required 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 $ 120,000 $ $ 105,000 15,000 91,000 67,000 24,000 158, 175 110,000 48,175 $ $ $ Sales Cost of goods sold Gross margin Store support: Order processing Receiving Shelf-stocking Customer support 800 $ $ 8,000 3,600 6,050 1,320 13,200 6,300 8,400 18,060 8,420 18,050 39,260 Total store support cost Operating income (loss) Operating margin (loss) % % %