(this drop box is same for all boxes except for 2nd box)

Granger Supermarkets (GS) found that its ABC analysis provided important insights GS extends the analysis to cover three more product lines: baked goods, milk and fruit juice, and frozen products. It identifies four activities and the activity cost rates for each activity as provided. (Click the icon to view the activity cost rates) The revenues, cost of goods sold, store support costs, and activity area usage of the three product lines are as follows. (Click the icon to view the information for the three product lines) Required Requirement 1. Use the simple costing system to prepare a product-line profitability report for GS. (Round the percentages to two decimal places, X.XX% Use parentheses or a minus sign for an operating loss) Milk and Fruit Frozen Baked Goods Juice Products Total Revenues $ 61.500 5 77 500 S 60.500 5 199 500 Costs Cost of goods sold 36,000 48,000 34,000 118,000 Store support 10,800 14.400 10,200 35,400 Total costs 46 800 62 400 44.200 153 400 S 14,700 5 15 100 5 16,300 $ 46.100 Operating income Operating income/Revenues 23.90 % 19.48 % 26 94 % 23.11 % Requirement 2. Use the ABC system to prepare a product-line profitability report for GS. (Round the percentages to two decimal places XXX% Use parentheses or a minus sign for an operating loss) Milk and Fruit Frozen Baked Goods Juice Products Total $ 61,500 $ 77 500 S 60,500 5 199,500 Revenues Costs Cost of goods sold 36,000 48,000 34.000 118,000 Ordering 2.550 2,040 1,530 6,120 Delivery 7,020 2.730 2,340 12.090 Requirement 2. Use the ABC system to prepare a product-line profitability report for GS (Round the percentages to two decimal places, X.XX%. Use parentheses or a minus sign for an operating loss.) Milk and Fruit Frozen Baked Goods Juice Products Total Revenues $ 61,500 5 77,500 5 60,500 5 199,500 Costs Cost of goods sold 36,000 48,000 34,000 118,000 Ordering 2,550 2,040 1,530 6,120 Delivery 7,020 2,730 2.340 12,090 Shelf-stocking 3.990 3,780 840 8,610 Customer support 2.970 3,850 1,760 8,580 Total costs 52.530 60,400 40.470 153,400 $ 8.970 $ 17,100 $ 20.030 $ 46.100 Operating income Operating income/Revenues 14.59 % 22.06 % 33 11 % 23 11 % Requirement 3. What new insights does the ABC system in requirement 2 provide to GS managers? The V line drops sizably in profitability when ABC is used. The product line uses in each activity area in contrast used less of the total resources in each activity area. Hence, under ABC Vis much more profitable Granger Supermarkets may want to explore price increases on - X exte Activity cost rates ce, and frozen ep Ordering S102 per purchase order Delivery and receipt of merchandise $78 per delivery Shelf stocking $21 per hour Customer support and assistance $0 22 per item sold - Info for the three product lines Milk and Fruit Frozen Baked Goods Juice Products Financial data Revenues S 61,500 $ 77,500 $ 60,500 Cost of goods sold $ 36.000 $ 48,000 $ 34.000 Store support $ 10 800 $ 14.400 S 10 200 Activity area usage (cost driver) Ordering (purchase orders) 25 20 15 Delivery (deliveries) 90 35 30 Shell-stocking (hours) 190 180 40 Customer support (items sold) 13.500 17,500 8,000 Under its simple costing system, GS allocated support costs to products at the rate of 30% of cost of goods sold. There are no bottle returns for any of these three product lines. Print Done 23 % Requirement 3. What new insights does the ABC system in requirer The line drops sizably in profitability when ABC contr ed less of the total resources in eac profit s may want to explore price increase baked goods frozen products milk and fruit juice Click ind then click Check Answer. nagers? uses in each act der Al less resources more resources 70 % Requirement 3. What new insights does the ABC system in requirement 2 provide to GS managers? The line drops sizably in profitability when ABC is used. The product line uses contrast, used less of the total resources in each activity area. Hence, under ABC, profitable. Granger Supermarkets may want to explore price increases on in each activity area. In is much more Click to select your answer(s) and then click Check