4 ABC, retail product line profitability. Family Supermarkets (FS) found that its ABC analysis (see p. 105) provided important insights. It extends the analysis to cover three more product lines-baked goods, milk and fruit juice, and frozen foods. The revenues, cost of goods sold, store support costs, and activity area usage of the three product lines is as follows: Financial data: Revenues Cost of goods sold Store support Activity area usage (cost driver): Ordering (purchase orders) Delivery (deliveries) Shelf stocking (hours) Customer support (items sold) Baked Goods $57,000 38,000 11,400 30 98 183 15,500 Milk and Fruit Juice $63,000 47,000 14,100 25 36 166 20,500 Frozen Products $52,000 35,000 10,500 13 28 24 7,900 1) Use the peanit butter approach, where support costs are allocated to products at the rate of 30% of cost of goods sold, to compute a product line profitability report. 1) Use the ABC system(ordering at $100 per purchase order, delivery at $80 per delivery, shelf stacking at $20 per hour, and customer support at $0.20 per item sold) to compute a product lin profitability report
4 ABC, retail product line profitability. Family Supermarkets (FS) found that its ABC analysis (see p. 105) provided important insights. It extends the analysis to cover three more product lines-baked goods, milk and fruit juice, and frozen foods. The revenues, cost of goods sold, store support costs, and activity area usage of the three product lines is as follows: Financial data: Revenues Cost of goods sold Store support Activity area usage (cost driver): Ordering (purchase orders) Delivery (deliveries) Shelf stocking (hours) Customer support (items sold) Baked Goods $57,000 38,000 11,400 30 98 183 15,500 Milk and Fruit Juice $63,000 47,000 14,100 25 36 166 20,500 Frozen Products $52,000 35,000 10,500 13 28 24 7,900 1) Use the peanit butter approach, where support costs are allocated to products at the rate of 30% of cost of goods sold, to compute a product line profitability report. 1) Use the ABC system(ordering at $100 per purchase order, delivery at $80 per delivery, shelf stacking at $20 per hour, and customer support at $0.20 per item sold) to compute a product lin profitability report
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
ii
Transcribed Image Text:4 ABC, retail product line profitability. Family Supermarkets (FS) found
that its ABC analysis (see p. 105) provided important insights. It extends the
analysis to cover three more product lines-baked goods, milk and fruit
juice, and frozen foods. The revenues, cost of goods sold, store support
costs, and activity area usage of the three product lines is as follows:
Financial data:
Revenues
Cost of goods sold
Store support
Activity area usage (cost driver):
Ordering (purchase orders)
Delivery (deliveries)
Shelf stocking (hours)
Customer support (items sold)
Baked
Goods
$57,000
38,000
11,400
30
98.
183
15,500
Milk and
Fruit Juice
$63,000
47,000
14,100
25
36
166
20,500
Frozen
Products
$52,000
35,000
10,500
13
28
24
7,900
1) Use the peanit butter approach, where support costs are allocated to products at the rate of 30%
of cost of goods sold, to compute a product line profitability report.
2) Use the ABC system(ordering at $100 per purchase order, delivery at $80 per delivery, shelf
stacking at $20 per hour, and customer support at $0.20 per item sold) to compute a product line
profitability report
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