Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in the last few periods

Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in the last few periods

Accounting

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:  

2. Prepare a product-line profitability report for SFS using the ABC information the controller provides.

Option 1

Low Cost Option
Download this past answer in few clicks

2.91 USD

PURCHASE SOLUTION

Already member?


Option 2

Custom new solution created by our subject matter experts

GET A QUOTE