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Please answer requirement 1

Requirement 1: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%).)

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 $127,000 110,000 Baked Goods $93,000 68,000 Fresh Produce $173,000 121,000 SFS estimates that store support expenses, in total, are approximately 19% 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 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) 10 10 42 51 101 126 4 20,000 0.4 32,000 4 64,000 The controller estimates activity-cost rates for each activity as follows: Order processing Receiving Shelf-stocking Customer support $ 78 per purchase order 110 per delivery 14.00 per hour 0.30 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 (ie. 0.2134 should be entered as 21.34%).) Frozen Food Baked Goods Fresh Produce $ 0 $ 0 $ 0 Operating income loss) Operating margin (loss) % %

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