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    Compute ABC Profit of Each Product Line

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    ABC foods has three product lines: Bakes, wet and frozen. ABC has four activity pools: ordering, delivering, and stocking with cost of $100/order and $80/delivery and $20/hour.

    Revenue= 57,000 63,000 52,000
    COGS 38.000 47,000 35,000
    Purchase Orders 30 25 13
    Deliveries 98 36 28
    Stocking Hrs 183 166 24

    a) compute ABC profit of each product line
    b) how will brand managers react to charges by activity use?
    c) How will activity cost per use change if the least profitable product lines were closed down?

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    Solution Summary

    The expert computes the ABC profit of each product line. How brand managers react to charges by activity use are determined.