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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 if SFS discontinues frozen foods. The operating results from the most recent period are: $ 205,000 $300,000 $352,000 Cost of goods sold 189,000 243,000 SFS estimates that store support expenses, in total, are approximately 13% 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 activites for these three product lines are: Order processing (number of purchase orders) Recelving (number of deliveries) Shelf-stocking (number of hours per delivery) Customer support (total units sold) 106 220 67 0.1 39,000 15 21,000 78,000 The controller estimates activity-cost rates for each activity as follows: S 107 per purchase order 114 per delivery 20.00 per hour Customer support 0.22 per item 1. Prepare a product-ine 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 (Le 2134 should be entered as 21.34% 20 ooD 2 4

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