Moses and Co. Market Wholefoods is an Australian-based exclusive retailer of Tofutti Brands's dairy-free products. It...

 

Transcribed Image Text:

Moses and Co. Market Wholefoods is an Australian-based exclusive retailer of Tofutti Brands's dairy-free products. It operates at capacity and decides to apply ABC analysis to the three main Tofutti Brands' dairy-free product lines it retails: baked goods (including pizzas and Mintz's Blintzes, pre-baked dairy free cheese filled crepes), dairy-free cheeses, and frozen products (such as raviolis, ice-creams, desserts). It identifies four activities which generate most of the indirect costs, and their activities cost rates as follows: Ordering Delivery and receipt of products 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 Tofutti Brands' product lines are as follows: Financial data: Revenues Cost of goods sold Store support Data on activities: Ordering (purchase orders) Delivery (deliveries) Shelf-stocking (hours) Customer support (items sold) Baked goods (pizzas, Mintz' Blintzes) $60,000 $41,000 $12,300 $95 per purchase order $76 per delivery $19 per hour $0.15 per item sold 44 120 170 15,400 Dairy-free cheeses $66,500 $51,000 $15,300 24 60 150 20,200 Frozen products (raviolis, ice- creams, desserts) $50,500 $32,000 $9,600 14 36 20 7,960 Case study continued - Under its costing system, Moses and Co. Market Wholefoods allocates support costs to products at the rate of 30% of cost of goods sold. Required: a) Use the traditional costing system to prepare a product-line profitability report for Moses and Co. Market Wholefoods. [1] b) Use the ABC system to prepare a product-line profitability report for Moses and Co. Market Wholefoods. [2] c) Provide a comparative ranking of the product lines by profitability percentage under traditional and ABC systems. [1] d) What new insights does ABC system provide to Moses and Co. Market Wholefoods' managers? Detail your explanation. [2] Moses and Co. Market Wholefoods is an Australian-based exclusive retailer of Tofutti Brands's dairy-free products. It operates at capacity and decides to apply ABC analysis to the three main Tofutti Brands' dairy-free product lines it retails: baked goods (including pizzas and Mintz's Blintzes, pre-baked dairy free cheese filled crepes), dairy-free cheeses, and frozen products (such as raviolis, ice-creams, desserts). It identifies four activities which generate most of the indirect costs, and their activities cost rates as follows: Ordering Delivery and receipt of products 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 Tofutti Brands' product lines are as follows: Financial data: Revenues Cost of goods sold Store support Data on activities: Ordering (purchase orders) Delivery (deliveries) Shelf-stocking (hours) Customer support (items sold) Baked goods (pizzas, Mintz' Blintzes) $60,000 $41,000 $12,300 $95 per purchase order $76 per delivery $19 per hour $0.15 per item sold 44 120 170 15,400 Dairy-free cheeses $66,500 $51,000 $15,300 24 60 150 20,200 Frozen products (raviolis, ice- creams, desserts) $50,500 $32,000 $9,600 14 36 20 7,960 Case study continued - Under its costing system, Moses and Co. Market Wholefoods allocates support costs to products at the rate of 30% of cost of goods sold. Required: a) Use the traditional costing system to prepare a product-line profitability report for Moses and Co. Market Wholefoods. [1] b) Use the ABC system to prepare a product-line profitability report for Moses and Co. Market Wholefoods. [2] c) Provide a comparative ranking of the product lines by profitability percentage under traditional and ABC systems. [1] d) What new insights does ABC system provide to Moses and Co. Market Wholefoods' managers? Detail your explanation. [2]

Answer rating: 100% (QA)

Here are the steps to solve this problem a Productline profitability report using traditional costin... View the full answer