Section #2 Comprehensive Questions Question 16 (14 points) Freeman Supermarkets (FS) operates at capacity and decides to apply Activity Based Costing (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: Activities Cost rates Ordering $80 per purchase order Delivery and receipt of merchandise $72 per delivery Shelf-stocking $19 Customer support and assistance $0.25 per item sold 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: per hour Financial data Revenues Cost of goods sold Store support Baked Goods $75.000 $47,800 $16.730 Milk and Fruit Juice $78.500 $53.800 $18,830 Frozea Products 59500 34000 11900 MagicBook Financial data Revenues Cost of goo Store suppo old Baked Goods $75.000 $47.800 $16.730 Milk and Fruit Juice $78.500 $53.800 $18.830 Frozen Products 59500 34000 11900 Activity area usage (cost-allocation base) Frozes Products 20 Ordering (purchase orders) Delivery (deliveries) Shelf-stocking (hours) Customer support (items sold) Baked Goods 25 100 200 15400 Actual level Milk and Fruit Juice 55 120 170 20500 40 25 8000 Under its simple costing system. FS allocated support costs to products at the rate of 35% of cost of goods sold. Hint: Type your answers in the Blank spaces provided for the questions. NO SPACE OR COMMA should be in your answers. Type 10000 dollars as $10000 Required: Blank#1: Using the simple costing system, determine the Operation Income of Baked Goods (remember to put the dollar sign e.g $10000). Blank#2: Using the simple costing system, determine the Operation Income of Milk and Fruit Juice (remember to put the dollar sign e.g $10000). Hint: Type your an in the Blank# spaces provided for the questions. NO SPACE OR COMMA should be in your answers. Type 100 dollars as $10000 Required: Blank#1: Using the simple costing system, determine the Operation Income of Baked Goods (remember to put the dollar sign e.g $10000). Blank#2: Using the simple costing system, determine the Operation Income of Milk and Fruit Juice (remember to put the dollar sign e.g $10000). Blank#3: Using the simple costing system, determine the Operation Income of Frozen Products (remember to put the dollar sign e.g $10000). Blank#4: What is the operating margin (%) of Baked Goods using simple costing system? (Round up your answer to a whole number e.g 14.56% should be 15%). Blank#5: What is the operating margin (%) of Milk and Fruit Juice using simple costing system? (Round up your answer to a whole number eg 14.56% should be 15%). Blank#6: What is the operating margin (%) of Frozen Products using simple costing system? (Round up your answer to a whole number e.g 14.56% should be 15%). 11.JUJU STIUUIU De 15%). Blank#7: What is the ABC Store Support cost for Baked Goods? - (Use dollar sign for your answer e.g $5000) Blank#8: What is the ABC Store Support cost for Milk and Fruit Juice? - (Use dollar sign for your answer e.g $5000) Blank#9: What is the ABC Store Support cost for Frozen Products? - (Use dollar sign for your answer e.g $5000) Blank#10: What is the operating margin of Baked Goods using ABC system? (Round up your answer to a whole number e.g 14.56% should be 15%). Blank#11: What is the operating margin of Milk and Fruit Juice using ABC system? (Round up your answer to a whole number e.g 14.56% should be 15%). Blank#12: What is the operating margin of Frozen Products using ABC system? (Round up your answer to a whole number e.g 14.56% should be 15%). Blank#13: Considering the Simple costing method and ABC, which product would you rank last from your analysis in terms of profitability?(e.g - Frozen Products or Baked Goods or Milk and Fruit Juice) Blank#14: Sh the management change the costing system from the simple method to the ABC system? (Yes or No) Blank # 1 Blank # 2 Blank # 3 Blank #4 Blank # 5 Blank # 6 Blank # 7 AY Blank # 8 Blank #9 AJ Blan AJ Blank 5 A/ Blank # 6 Blank #7 Blank #8 Blank #9 A Blank # 10 AM Blank # 11 A/ Blank # 12 Blank # 13 Section #2 Comprehensive Questions Question 16 (14 points) Freeman Supermarkets (FS) operates at capacity and decides to apply Activity Based Costing (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: Activities Cost rates Ordering $80 per purchase order Delivery and receipt of merchandise $72 per delivery Shelf-stocking $19 Customer support and assistance $0.25 per item sold 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: per hour Financial data Revenues Cost of goods sold Store support Baked Goods $75.000 $47,800 $16.730 Milk and Fruit Juice $78.500 $53.800 $18,830 Frozea Products 59500 34000 11900 MagicBook Financial data Revenues Cost of goo Store suppo old Baked Goods $75.000 $47.800 $16.730 Milk and Fruit Juice $78.500 $53.800 $18.830 Frozen Products 59500 34000 11900 Activity area usage (cost-allocation base) Frozes Products 20 Ordering (purchase orders) Delivery (deliveries) Shelf-stocking (hours) Customer support (items sold) Baked Goods 25 100 200 15400 Actual level Milk and Fruit Juice 55 120 170 20500 40 25 8000 Under its simple costing system. FS allocated support costs to products at the rate of 35% of cost of goods sold. Hint: Type your answers in the Blank spaces provided for the questions. NO SPACE OR COMMA should be in your answers. Type 10000 dollars as $10000 Required: Blank#1: Using the simple costing system, determine the Operation Income of Baked Goods (remember to put the dollar sign e.g $10000). Blank#2: Using the simple costing system, determine the Operation Income of Milk and Fruit Juice (remember to put the dollar sign e.g $10000). Hint: Type your an in the Blank# spaces provided for the questions. NO SPACE OR COMMA should be in your answers. Type 100 dollars as $10000 Required: Blank#1: Using the simple costing system, determine the Operation Income of Baked Goods (remember to put the dollar sign e.g $10000). Blank#2: Using the simple costing system, determine the Operation Income of Milk and Fruit Juice (remember to put the dollar sign e.g $10000). Blank#3: Using the simple costing system, determine the Operation Income of Frozen Products (remember to put the dollar sign e.g $10000). Blank#4: What is the operating margin (%) of Baked Goods using simple costing system? (Round up your answer to a whole number e.g 14.56% should be 15%). Blank#5: What is the operating margin (%) of Milk and Fruit Juice using simple costing system? (Round up your answer to a whole number eg 14.56% should be 15%). Blank#6: What is the operating margin (%) of Frozen Products using simple costing system? (Round up your answer to a whole number e.g 14.56% should be 15%). 11.JUJU STIUUIU De 15%). Blank#7: What is the ABC Store Support cost for Baked Goods? - (Use dollar sign for your answer e.g $5000) Blank#8: What is the ABC Store Support cost for Milk and Fruit Juice? - (Use dollar sign for your answer e.g $5000) Blank#9: What is the ABC Store Support cost for Frozen Products? - (Use dollar sign for your answer e.g $5000) Blank#10: What is the operating margin of Baked Goods using ABC system? (Round up your answer to a whole number e.g 14.56% should be 15%). Blank#11: What is the operating margin of Milk and Fruit Juice using ABC system? (Round up your answer to a whole number e.g 14.56% should be 15%). Blank#12: What is the operating margin of Frozen Products using ABC system? (Round up your answer to a whole number e.g 14.56% should be 15%). Blank#13: Considering the Simple costing method and ABC, which product would you rank last from your analysis in terms of profitability?(e.g - Frozen Products or Baked Goods or Milk and Fruit Juice) Blank#14: Sh the management change the costing system from the simple method to the ABC system? (Yes or No) Blank # 1 Blank # 2 Blank # 3 Blank #4 Blank # 5 Blank # 6 Blank # 7 AY Blank # 8 Blank #9 AJ Blan AJ Blank 5 A/ Blank # 6 Blank #7 Blank #8 Blank #9 A Blank # 10 AM Blank # 11 A/ Blank # 12 Blank # 13