Studemeir Paint & Floors (SPF) has experienced net operating losses in its Other Flooring Products line during the last few periods. SPF's management team thinks that the store will improve its profitability if it discontinues the Other Flooring Products line. The operating results from the most recent period are: Paint and Paint Other Flooring Supplies Sales $ Cost of goods sold Carpet 421,300 $219,500 $ 168,000 164,000 Products 171,000 138,250 SPF estimates that store support expenses are approximately 20% 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: Activity (cost driver) Paint and Paint Supplies Carpet Other Flooring Products Order processing (number of purchase orders) Receiving (number of deliveries) 429 120 100 Customer support (hours required per sale) 52 0.50 100 8.0 70 0.78 Harish estimates activity-cost rates for each activity as follows: Order processing Receiving Customer support Required: $ 150 per purchase order 180 per delivery 20 per hour 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.