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# Seven Supermarkets {25} has decided to increase the size of its Store. It wants information about the profitabilitv of individual product lines: soft...

Seven Supermarkets (7S) has decided to increase the size of its Store. It wants information about the profitability of individual product lines: soft drinks, fresh produce and package food. 7S provides the following data for the year 2016 for each product line:

Seven Supermarkets {25} has decided to increase the size of its Store. It wants information about the
profitabilitv of individual product lines: soft drinks, fresh produce and package food. 25 provides the following data for the vear 2016 for each product line: Soft drinks Packaged iooti Revenues 840 240 483 960
Cost of good sold 600 000 360 000
Cost of bottles returned 0 0
Number of purchase orders placed 336 144
Numbers of deliveries received 876 Hours of shelf-stocking time 2 160 Items sold 441 600 25 also provides the following information for the vear 2616: Description of activiaa T otai costs Bottle returns Returning of emptyr bottles to store 4 800 Direct tracing to soft-
drink line Ordering Placing of orders for purchase 62 400 624 purchase orders Delivery.r Physical deliveri,i and receipt for 100 BUD 1260 deliveries
merchandise Shelf-stocking Stocking of merchandise on store shelves 69 120 3 456 hours of stocking and ongoing restocking time
Customer support Assistance provided to customers 122 880 614 400 items sold including check out and bagging 1,! Seven Supermarkets currentlv allocate store supports costs [all costs other than cost of goods
sold} to product lines on the basis of costs of goods sold of each product line. Calculate the full cost,
the operating profit and the operating profit ratio. 2! If 25 allocates store support costs {all costs other than costs of goods sold} to product lines using
an ABC svstem, Calculate the full cost, the operating profit and the operating profit ratio for each
product lines. 3! What is the most relevant approach? Explain why [give at least two reasons]

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