The HomeMart is the latest trending brand offering home improvement appliances with broadest selection of products with highly competitive prices.…

The HomeMart is the latest trending brand offering home improvement appliances with broadest selection of products with highly competitive prices. The sale is increasing year by year with huge multiples. Current year also the sales reached triple the last year. The reason being company having good customer support where it provides after sales assistance over phone per item sold. Though it costs only Re. 1 per item sold to the company, it enhanced to ₹ 49,15,200 last year making a huge impact on the total support cost. All the company's appliances have been majorly categorised into three product lines namely Fancy fans, Home decors, Assembled furniture. During the current year, the company's revenue as generated is ₹ 3,80,88,000, ₹ 10,08,28,800 and ₹ 5,80,75,200 respectively. However, the cost of god sold is ₹ 2,88,00,000, ₹ 7,20,00,000 and ₹ 4,32,00,000 respectively. In business, there's a saying “The packaging sells the product the first time, but what's inside sells the product a second time”. Following the saying, the company has the policy of taking back the cartons of the products sold relating to Fancy fans to reduce the packaging cost. However, for smooth returning of cartons, the company has to incur certain carrier cost on its own which is 5,76,000 for the current year and allocating the same directly to the said product. Some other information relating to each of the product lines is provided below: Fancy fans Home decors Assembled furniture Items sold 12,09,600 1,05,98,400 29,37,600 Number of deliveries received 600 4,380 1,320 Number of purchase orders placed 720 1,680 720 Hours of shelf-stocking time 1,080 10,800 5,400 The company also provides the following basis of cost allocation: Activity Description of activity Total Cost Cost-allocation base Delivery Physical delivery and receipt of products 1,20,96,000 6,300 deliveries Ordering Placing of orders for purchases 74,88,000 3,120 purchase orders Shelf stocking Stocking of products in warehouse 82,94,400 17,280 hours of shelf-stocking time The company wants you to FIGURE OUT the following to ascertain which of the product line is more profitable and answer the following question (MCQ 6 to 10):