Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in...
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 | $ | 135,000 | $ | 120,000 | $ | 194,000 | |||
| Cost of goods sold | 117,000 | 88,000 | 136,000 | ||||||
SFS estimates that store support expenses, in total, are approximately 23% 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) | 12 | 49 | 100 | ||||||
| Receiving (number of deliveries) | 12 | 52 | 131 | ||||||
| Shelf-stocking (number of hours per delivery) | 3 | 0.1 | 6 | ||||||
| Customer support (total units sold) | 22,000 | 35,000 | 70,000 | ||||||
The controller estimates activity-cost rates for each activity as follows:
| Order processing | $ | 81 | per purchase order |
| Receiving | 108 | per delivery | |
| Shelf-stocking | 12.00 | per hour | |
| Customer support | 0.25 | 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. 0.2134 should be entered as 21.34%).)
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Frozen FoodBaked GoodsFresh ProduceStore support:Total store support costOperating income (loss)Operating margin (loss)%%%
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Supermart Food Stores (SFS) has experienced net operating losses
in its frozen food products line in...
Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in...
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 $135,000 119,000 Fresh Baked Goods Produce $120,000 $184,000 88,000 128,000 Sales Cost of goods sold SFS estimates that store support expenses, in total, are approximately 17% of revenues. The controller says that not every sales...
Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in...
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 Sales Cost of goods sold $288,000 271, 000 Fresh Produce $524, 000 404, 000 Baked Goods $493, 000 399,000 SFS estimates that store support expenses, in total, are approximately 13% of revenues. The controller says...
Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in...
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 Sales Cost of goods sold $288,000 271, 000 Fresh Produce $524, 000 404, 000 Baked Goods $493, 000 399,000 SFS estimates that store support expenses, in total, are approximately 13% of revenues. The controller says...
Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in the last few perio...
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: Baked Fresh Frozen Foods Goods Produce $126,000 110,000 Sales $98,000 $165,000 115,000 Cost of qoods sold 72,000 SFS estimates that store support expenses, in total, are approximately 14% of revenues. The controller says that not every sales...
Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in...
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 $129,000 111,000 Sales Cost of goods sold 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...
Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in...
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: Baked Fresh Frozen Foods Goods Produce $91,000 67,000 $158,175 110,000 Sales $120,000 Cost of goods sold 105,000 SFS estimates that store support expenses, in total, are approximately 20% of revenues. The controller says that not every sales...
Supermart Food Stores (SFS) has experienced net operating losses in its frozen food products line in...
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 $ 148,000 $ 142,000 $ 211,000 Cost of goods sold 128,000 104,000 153,000 SFS estimates that store support expenses, in total, are approximately 14% of revenues. The controller says that...
TELEIL penuu die. Frozen Foods $135,000 117,000 Fresh Baked Goods Produce $120,000 $194,000 88,000 136,000 Sales...
TELEIL penuu die. Frozen Foods $135,000 117,000 Fresh Baked Goods Produce $120,000 $194,000 88,000 136,000 Sales Cost of goods sold SFS estimates that store support expenses, in total, are approximately 23% 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: Frozen Foods Baked Goods Fresh Produce 12 Activity (cost driver) Order processing (number of purchase orders)...
Studemeir Paint & Floors (SPF) has experienced net operating losses in its Other Flooring Products line...
Studemeir Paint & Floors (SPF) has experienced net operating losses in its Other Flooring Products line during the last few periods. SPF’s management team thinks that the store will improve its profitability if it discontinues the Other Flooring Products line. The operating results from the most recent period are: Paint and Paint Supplies Carpet Other Flooring Products Sales $ 431,400 $ 261,000 $ 196,000 Cost of goods sold 132,000 155,000 161,000 SPF estimates that store support expenses are approximately 25%...
Studemeir Paint & Floors (SPF) has experienced net operating losses in its Other Flooring Products line...
Studemeir Paint & Floors (SPF) has experienced net operating losses in its Other Flooring Products line during the last few periods. SPF’s management team thinks that the store will improve its profitability if it discontinues the Other Flooring Products line. The operating results from the most recent period are: Paint and Paint Supplies Carpet Other Flooring Products Sales $ 174,100 $ 280,000 $ 216,000 Cost of goods sold 100,000 195,000 172,000 SPF estimates that store support expenses are approximately 25%...
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 $135,000 119,000 Fresh Baked Goods Produce $120,000 $184,000 88,000 128,000 Sales Cost of goods sold SFS estimates that store support expenses, in total, are approximately 17% of revenues. The controller says that not every sales...
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 Sales Cost of goods sold $288,000 271, 000 Fresh Produce $524, 000 404, 000 Baked Goods $493, 000 399,000 SFS estimates that store support expenses, in total, are approximately 13% of revenues. The controller says...
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 Sales Cost of goods sold $288,000 271, 000 Fresh Produce $524, 000 404, 000 Baked Goods $493, 000 399,000 SFS estimates that store support expenses, in total, are approximately 13% of revenues. The controller says...
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: Baked Fresh Frozen Foods Goods Produce $126,000 110,000 Sales $98,000 $165,000 115,000 Cost of qoods sold 72,000 SFS estimates that store support expenses, in total, are approximately 14% of revenues. The controller says that not every sales...
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 $129,000 111,000 Sales Cost of goods sold 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...
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: Baked Fresh Frozen Foods Goods Produce $91,000 67,000 $158,175 110,000 Sales $120,000 Cost of goods sold 105,000 SFS estimates that store support expenses, in total, are approximately 20% of revenues. The controller says that not every sales...
TELEIL penuu die. Frozen Foods $135,000 117,000 Fresh Baked Goods Produce $120,000 $194,000 88,000 136,000 Sales Cost of goods sold SFS estimates that store support expenses, in total, are approximately 23% 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: Frozen Foods Baked Goods Fresh Produce 12 Activity (cost driver) Order processing (number of purchase orders)...
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