FTA Inc. is a small distributor of drawing pencils. FTA identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2020 :

For 2020, FTA buys 200,000 pencil packs at an average cost of $10 per pack and sells them to retailers at an average price of $15 per pack. Assume FTA has no fixed costs and no inventories. For 2021, retailers are demanding a 5% discount off the 2020 price. FTA suppliers are only willing to give a 3% discount. FTA expects to sell the same quantity of pencil packs in 2021 as it did in 2020.

Using value engineering, FTA decides to make changes in its ordering and receiving-and storing practices. By placing long-run orders with its key suppliers, FTA expects to reduce the number of orders to 500 and the cost per order to $50. By redesigning the layout of the warehouse and reconfiguring the crates in which the pencil packs are moved, FTA expects to reduce the number of loads moved to 4000 and the cost per load moved to $30.

Will FTA achieve its target operating income of $90,000 and its target operating in- come per unit of $0.36 per pencil pack in 2021? Show your calculation

Activity Cost Driver Quantity of Cost Driver Cost per unit of cost driver Number of orders 600 $150 Placing and playing for orders of drawing pencil packs Loads movement 5000 $40 Receiving and storage Shipping 2000 $100 Number of shipments