Greg Miller is the management accountant for Gamma Restaurant Supply (GRS). Mandy Morgan, the GRS sales manager, and Greg are meeting to discuss the profitability of one of the customers, Little Tony's Pizza. Greg hands Mandy the following analysis of Little Tony's activity during the last quarter, taken from GRS's activity-based costing system: (Click the icon to view Little Tony's activity for the last quarter.) (Click the icon for additional information.) i Requirements Read the requirements, Ditrerence: incremental (1038 In revenues) and savings in costs Assume that Mandy is partly correct in her assessment of the report. Upon further from dropping Little Tony's investigation, it is determined that 5% of the order processing costs and 20% of the Revenues $ (25,300) delivery costs would not be avoidable if GRS were to drop Little Tony's. Would GRS benefit from dropping Little Tony's? Show your calculations. Cost of goods sold 13,750 Mandy's bonus is based on meeting sales targets. Based on the preceding information Order processing 6,612 regarding gross margin percentage, what might Mandy have done last quarter to meet her target and receive her bonus? How might GRS revise its bonus system to address Delivery 800 this? Rush orders 165 Sales calls 290 Done Total costs 21.617 $ (3,683) Effect on operating income (loss) Sales $ 25,300 Will GRS's operating income be higher or lower? lower Cost of goods sold (all variable) 13,750 By how much? (548) Order processing (24 orders processed at $290 per order) 6,960 Should GRS discontinue Little Tony's Delivery (2,000 miles driven at $0.50 per mile) No order? 1,000 Rush orders (1 rush orders at $165 per rush order) 165 290 Choose from any list or enter any number in the input fields and then click Check Answer. Customer sales visits (2 sales calls at $145 per call) Total costs 22,165