If you feel you can confront her in a professional manner, but I still would be prepared to copy upper management.
I think what might be best is for you, the assistant manager, and any other employees to ask for meeting. Consider it an intervention it might be the best thing that ever happened to her as well as others involved. I know how much folks need a job, but no one should be disrespected or fearful of speaking up when something is wrong.
Blessings.....Please keep us posted.
Start documenting every thing your supervisor does and says. (Date, time offensive behavior). If you are working for a chain restaurant such as Denny's, McDonalds, Chili's etc., send a letter of complaint to corporate headquarters, and copy the Labor Board and/EEOC. If you get no results and should you be fired, you and other employees would most likely have a good case against the company.
Many of the large chain restaurants have an online complaint form.
What ever you do, don't sink to her level.
Blessings.....