a Best Drugs is a distributor of pharmaceutical products. Its ABC system has five activities: |(Click the icon to view the activities.) Rick Flair, the controller of Best Drugs, wants to use this ABC system to examine individual customer profitability within each distribution market. (Click the icon to view additional information.) Read the requirements. Requirement 1. Use the ABC information to compute the operating income of each customer in August 2017. Comment on the results and what, if anything, Flair should do. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for operating losses.) Albany Pharmacy Revenues Cost of goods sold Gross margin Operating costs Operating income(loss) Requirements 1. Use the ABC information to compute the operating income of each customer in August 2017. Comment on the results and what, if anything, Flair should do. 2. Flair ranks the individual customers in the Ma and Pa single-store distribution market on the basis of monthly operating income. The cumulative operating income of the top 20% of customers is $62,350. Best Drugs reports operating losses of $22,410 for the bottom 40% of its customers. Make four recommendations that you think Best Drugs should consider in light of this new customer-profitability information. wha - U More info Data table He focuses first on the Ma and Pa single-store distribution market. Using only two customers helps highlight the insights available with the ABC approach. Data pertaining to these two customers in August 2017 are as follows: Activity Area Cost Driver Rate in 2017 $40 per order 1. Order processing 2. Line-item ordering Albany Pharmacy San Diego Pharmacy $3 per line item 13 Total orders 3. Store deliveries 9 $55 per store delivery 6 Average line items per order 19 4. Carton deliveries $5 per carton 5. Shelf-stocking Total store deliveries 4 8 $15 per stocking-hour 18 24 0.5 0.75 Average cartons shipped per store delivery Average hours of shelf-stocking per store delivery Average revenue per delivery Average cost of goods sold per delivery $ 2,400 $ 1,800 Print Done A A 2,150 $ 1,500