Fitzgerald Supermarkets (FS) operates at capacity and de- cides to apply ABC analysis to three product lines: baked goods, milk and fruit juice, and frozen foods. It identifies four activities and their activity cost rates as follows: $95 per purchase order S76 per delivery $19 per hour $0.15 per item sold Ordering Delivery and receipt of merchandise Shelf-stocking Customer support and assistance The revenues, cost of goods sold, store support costs, activities that account for the store support costs, and activity-area usage of the three product lines are as follows: Baked Goods Milk and Fruit Juice Frozen Products Financial data S66,500 $51,000 $15,300 S50,500 $32,000 $ 9,600 Revenues S60,000 S41,000 Cost of goods sold Store support Activity-area usage (cost-allocation base) Ordering (purchase orders) Delivery (deliveries) Shelf-stocking (hours) Customer support (items sold) $12,300 24 44 14 120 60 36 170 150 20 20,200 15,400 7,960 Under its simple costing system, FS allocated support costs to products at the rate of 30% of cost of goods sold.

Fitzgerald Supermarkets (FS) operates at capacity and de- cides to apply ABC analysis to three product lines: baked goods, milk and fruit juice, and frozen foods. It identifies four activities and their activity cost rates as follows: $95 per purchase order S76 per delivery $19 per hour $0.15 per item sold Ordering Delivery and receipt of merchandise Shelf-stocking Customer support and assistance The revenues, cost of goods sold, store support costs, activities that account for the store support costs, and activity-area usage of the three product lines are as follows: Baked Goods Milk and Fruit Juice Frozen Products Financial data S66,500 $51,000 $15,300 S50,500 $32,000 $ 9,600 Revenues S60,000 S41,000 Cost of goods sold Store support Activity-area usage (cost-allocation base) Ordering (purchase orders) Delivery (deliveries) Shelf-stocking (hours) Customer support (items sold) $12,300 24 44 14 120 60 36 170 150 20 20,200 15,400 7,960 Under its simple costing system, FS allocated support costs to products at the rate of 30% of cost of goods sold.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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