For each of the seven product categories, compute the average operating profit per unit and unit operating margin (expressed as a percentage of average unit price) under the soon-to-be proposed system where other operating costs (i.e., beyond COGS) are allocated to product categories using the Cost-to-Serve information developed by Tram Zhou in the case. Make these allocations as accurate as possible given the information in the case. If different types of costs have different cost drivers, then each type of costs needs its own cost pool/cost driver/allocation rate (hint there are more than six cost pools). Justify your choice of cost pools and allocation bases. Assume that within a product category, each skew has the same number of units.

Product Category	2005 Annual Sales $	Average Price per Unit $	Gross Margin	SKUs Carried	Inventory Turns (per year)	Average Weight per unit (lbs)	Inbound Shipping Cost $	Average Size per unit (cubic feet)	Special Handle SKUs	Return Rate
Table and barware	8,631,000	32	44%	1,979	6.3	6.9	224,000	0.42	60%	3.2%
Small appliances	5,928,000	78	34%	882	6.1	8.4	176,900	0.86	26%	4.2%
Cookware	4,252,000	80	42%	815	7.5	6.6	97,100	0.61	12%	3.1%
Cooking tools	1,168,000	18	50%	330	5.1	1.3	17,200	0.10	2%	1.7%
Storage	2,419,000	23	49%	296	7.8	3.7	44,100	0.35	19%	3.0%
Bakeware	1,488,000	19	46%	474	5.6	2.6	26,000	0.16	13%	1.8%
Cutlery	3,921,000	56	43%	406	8.3	2.5	39,700	0.12	0%	2.5%
Total	27,807,000	39	42%	5,182	6.5	4.7	625,000	0.40	19%	2.9%