2. Deco Tiles is a small distributor of marble tiles. Deco identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2016: (Click the icon to view the details.) For 2016, Deco buys 220,000 marble tiles at an average cost of $2 per tile and sells them to retailers at an average price of $6 per tile. Assume Deco has no fixed costs and no inventories. Read the requirements Requirement 1. Calculate Deco's operating income for 2016. Revenues Costs: Purchase cost of tiles Ordering costs Receiving and storage Shipping Total costs Operating income Requirement 2. For 2017, retailers are demanding a 4% discount off the 2016 price. Deco's suppliers are only willing to give a 3% discount. Deco expects to sell the same quantity of marble tiles in 2017 as in 2016. If all other costs and cost-driver information remain the same, calculate Deco's operating income for 2017. Revenues Costs: Purchase cost of tiles Ordering costs Receiving and storage Shipping Total costs Operating income Requirement 3. Suppose further that Deco decides to make changes in its ordering and receiving-and-storing practices. By placing long-run orders with its key suppliers, Deco expects to reduce the number of orders to 600 and the cost per order to $40 per order. By redesigning the layout of the warehouse and reconfiguring the crates in which the marble tiles are moved, Deco expects to reduce the number of loads moved to 3,425 and the cost per load moved to $48. Will Deco achieve its target operating income of $2.16 per tile in 2017? Show your calculations. Begin by calculating Deco's operating income, then the per unit amounts if the company makes these changes. (Round the per unit amounts to the nearest cent.) Total Per Unit Revenues Costs: Purchase cost of tiles Ordering costs Receiving and storage Shipping Total costs Operating income Deco (1) to achieve its target operating income of $2.16 per tile in 2017 1: Data Table Activity Cost Driver 1. Placing and paying for orders of marble tiles Number of orders 2. Receiving and storage Loads moved 3. Shipping of marble tiles to retailers Number of shipments Quantity of Cost per Unit Cost Driver of Cost Driver 900 $80 per order 4,300 $50 per load 2,200 $40 per shipment 2: Requirements 1. Calculate Deco's operating income for 2016. ding a 4% discount off the 2016 price. Deco's suppliers are only willing to give a 3% discount. Deco expects to sell the same quantity of marble tiles in 2017 as in 2016. If all other costs and cost-driver information remain the same calculate Deco's operating income for 2017. 3. Suppose further that Deco decides to make changes in its ordering and receiving-and-storing practices. By placing long-run orders with its key suppliers, Deco expects to reduce the number of orders to 600 and the cost per order to $40 per order. By redesigning the layout of the warehouse and reconfiguring the crates in which the marble tiles are moved, Deco expects to reduce the number of loads moved to 3,425 and the cost per load moved to $48. Will Deco achieve its target operating income of $2.16 per tile in 2017? Show your calculations