i Data Table . X Revenues at list prices Discounts from list prices Cost of goods sold Delivery costs Order processing costs Cost of sales visit Wholesale Customers Retail Customers North America South America Green Global Wholesaler Wholesaler Energy Power $ 425,000 $ 550,000 $ 165,000 $ 100,000 33,000 45,000 7,400 500 330,000 485,000 124,000 86,000 400 690 150 135 900 1,050 175 150 5,600 5,100 2,000 1,450 Print Done Ossen-Tech has only two retail and two wholesale customers. Information relating to each customer for 2017 follows (in thousands): E: (Click the icon to view the data.) Ossen - Tech's annual distribution-channel costs are $40 million for wholesale customers and $4 million for retail customers. The company's annual corporate-sustaining costs, such as salary for top management and general-administration costs, are $63 million. There is no cause-and-effect or benefits-received relationship between any cost-allocation base and corporate-sustaining costs. That is, Ossen-Tech could save corporate-sustaining costs only if the company completely shuts down. Read the requirements Requirement 1. Calculate customer-level operating income. Begin by calculating each customer's gross margin. Then calculate the operating income for each customer. (Enter amounts in thousands.) All amounts in thousands of U.S. Dollars Wholesale Retail North America South America Green Global Wholesaler Wholesaler Energy Power Gross margin Choose from any list fields and then clickCheck Answer Requirements 1. Calculate customer-level operating income. 2. Prepare a customer-cost hierarchy report. 3. Ossen - Tech's management decides to allocate all corporate-sustaining costs to distribution channels: $47 million to the wholesale channel and $16 million to the retail channel. As a result, distribution channel costs are now $87 million (540 million + $47 million) for the wholesale channel and $20 million (54 million + $16 million) for the retail channel. Calculate the distribution-channel-level operating income. On the basis of these calculations, what actions, if any, should Ossen - Tech's managers take? Explain. 4. How might Ossen-Tech use the new cost information from its activity-based costing system to better manage its business