Harry Super Store Products Analysis Assignment Help With Solution

Harry Super-Store (HS) operates at capacity and decides to apply ABC analysis to three product lines: food, home utensils and lifestyle products. It identifies four activities and their activity cost rates as follows:

Ordering	$51 per purchase order
Delivery and receipt of merchandise	$39 per delivery
Shelf-stocking	$42 per hour
Customer support and assistance	$0.22 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:

	Food	Home utensils	Lifestyle products
Financial data
Revenues	$59,500	$59,500	$51,000
Cost of goods sold	$36,000	$48,000	$34,000
Store support	$10,800	$14,400	$10,200
Activity-area usage (cost-allocation base)
Ordering (purchase orders)	50	40	30
Delivery (deliveries)	180	70	60
Shelf-stocking (hours)	95	90	20
Customer support (items sold)	13,500	17,500	8,000

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Under its simple costing system, HS allocated support costs to products at the rate of 30% of cost of goods sold.

Required:

a.Use the simple costing system to prepare a product-line profitability report for HS.

b.Use the ABC system to prepare a product-line profitability report for HS.

c.What new insights does the ABC system in requirement (b) provide to HS managers?

Product Code :Acc-sol-01

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