Please do not give solution in image format thanku 3Studemeir Paint & Floors (SPF) is a retail store specializing in home improvement. The store has experienced net operating losses in itsOther Flooring Products line during the last few periods. SPF's management team thinks that the store will improve its profitability if itstops carrying the Other Flooring Products line. The operating results from the most recent period are:Paint and .CarpetPaintSupplies$ 278,600 $ 261,000154,000183,000SalesCost of goods soldSPF estimates that store operating expenses are approximately 24% of revenues.Harish Rana, SPF's controller, states that while every sale has one purchase order, not every sales dollar requires or uses the sameamount of store support activities. He conducts a preliminary investigation and his results and analysis are as follows:Order processingReceivingCustomer supportActivity (cost driver)Order processing (number of purchase orders)Receiving (number of deliveries)Customer support (hours required per sale)Harish estimates activity-cost rates for each activity as follows:$140 per purchase order190 per delivery20per hourStore support:OtherFlooringProducts$191,000150,000Paint & PaintSuppliesPaint and PaintSupplies410370.50$Required:1. Prepare a product-line profitability report for SPF under the current costing system.2. Prepare a product-line profitability report for SPF using the ABC information the controller provides.Complete this question by entering your answers in the tabs below.0 $Required 1 Required 2Prepare a product-line profitability report for SPF using the ABC information the controller provides. (Loss amounts should beindicated by a minus sign. Round operating margin (loss) to 2 decimal places (i.e. 0.2134 should be entered as 21.34%).Round all other answers to nearest whole dollar)CarpetCarpet1850Other FlooringProducts$1556.0other FlooringProducts116600.700 PrintReferences2. Prepare a producene prComplete this question by entering your answers in the tabs below.Required 1 Required 2Prepare a product-line profitability report for SPF using the ABC information the controller provides. (Loss amounts should beindicated by a minus sign. Round operating margin (loss) to 2 decimal places (i.e. 0.2134 should be entered a 21.34%).Round all other answers to nearest whole dollar.)Store support:Total store supportOperating income (loss)Operating margin (loss)Paint & PaintSupplies$00%$Carpet< Required 100%Other FlooringProducts$00%Required 2 >

Product-line Profitability is a product-line is a product set where the products have similar uses…

Studemeir Paint & Floors (SPF) is a retail store specializing in home improvement. The store has experienced net operating losses in Other Flooring Products line during the last few periods, SPF's management team thinks that the store will improve its profitability if stops carrying the Other Flooring Products line. The operating results from the most recent period are: Paint and Paint Supplies Carpet Sales $ 278,600 $ 261,000 154,000 183,000 Cost of goods sold SPF estimates that store operating expenses are approximately 24% of revenues. Harish Rana, SPF's controller, states that while every sale has one purchase order, not every sales dollar requires or uses the same amount of store support activities. He conducts a preliminary investigation and his results and analysis are as follows: Other Flooring Products $191,000 150,000 Paint and Paint Supplies 410 37 0.50 Activity (cost driver) Order processing (number of purchase orders) Receiving (number of deliveries) Customer support (hours required per sale) Harish estimates activity-cost rates for each activity as follows: Order processing $140 per purchase order 190 per delivery Receiving Customer support 20 per hour Carpet 185 155 6.0 Other Flooring Products 116 60 0.70 Required: 1. Prepare a product-line profitability report for SPF under the current costing system. 2. Prepare a product-line profitability report for SPF using the ABC information the controller provides.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q