Australian Mart (AM) operates at capacity and decides to apply ABC analysis to three product lines:...

Transcribed Image Text:

Australian Mart (AM) operates at capacity and decides to apply ABC analysis to three product lines: pastry and cakes, Dairy Products, and meat products. It identifies four activities and their activity cost rates as follows: Ordering Delivery and receipt of merchandise Shelf-stocking Customer support and assistance $100 per purchase order $ 80 per delivery $20 per hour $ 0.30 per item sold The revenues, cost of goods sold, store support costs, the activities that account for the store support costs, and activity-area usage of the three product lines are as follows: Particulars Fundamentals Revenue Cost of Goods sold Store support Pastry and Dairy Products cakes Meat Products 65000 50000 60000 35000 45000 45000 11000 15100 10500 Activities (Cost allocation base) Ordering (purchasing order) 30 25 13 Delivery (Deliveries) 98 36 28 Shelf-stocking (hours) 183 166 24 Customer support (item sold) 15500 20500 7900 Australian Mart (AM) operates at capacity and decides to apply ABC analysis to three product lines: pastry and cakes, Dairy Products, and meat products. It identifies four activities and their activity cost rates as follows: Ordering Delivery and receipt of merchandise Shelf-stocking Customer support and assistance $100 per purchase order $ 80 per delivery $20 per hour $ 0.30 per item sold The revenues, cost of goods sold, store support costs, the activities that account for the store support costs, and activity-area usage of the three product lines are as follows: Particulars Fundamentals Revenue Cost of Goods sold Store support Pastry and Dairy Products cakes Meat Products 65000 50000 60000 35000 45000 45000 11000 15100 10500 Activities (Cost allocation base) Ordering (purchasing order) 30 25 13 Delivery (Deliveries) 98 36 28 Shelf-stocking (hours) 183 166 24 Customer support (item sold) 15500 20500 7900

Answer rating: 100% (QA)

Answer To calculate the total cost and profitability of each product line well first allocate the st... View the full answer