Mastic Tiles is a small distributor of marble tiles. Mastic identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2016: (Click the icon to view the details.) For 2016, Mastic buys 300,000 marble tiles at an average cost of $2 per tile and sells them to retailers at an average price of $6 per tile. Assume Mastic has no fixed costs and no inventories. Read the requirements. Requirement 1. Calculate Mastic's operating income for 2016. Revenues $ 1,800,000 1 Costs: Purchase cost of tiles $ Ordering costs 600,000 56,000 164,000 69,000 Receiving and storage Shipping Total costs 889,000 $ 911,000 Operating income Requirement 2. For 2017, retailers are demanding a 5% discount off the 2016 price. Mastic's suppliers are only willing to give a 4% discount. Mastic expects to sell the same quantity of marble tiles in 2017 as in 2016. If all other costs and cost-driver information remain the same, calculate Mastic's operating income for 2017. Revenues Costs: Purchase cost of tiles Ordering costs MIT Receiving and storage Shipping Total costs Operating income - Data table Quantity of Cost Driver Cost per Unit of Cost Driver Cost Driver Number of orders Activity 1. Placing and paying for orders of marble tiles 2. Receiving and storage 3. Shipping of marble tiles to retailers Loads moved 700 $80 per order 4,100 $40 per load 2,300 $30 per shipment Number of shipments Print Done Requirements 1. 2. 3. Calculate Mastic's operating income for 2016. For 2017, retailers are demanding a 5% discount off the 2016 price. Mastic's suppliers are only willing to give a 4% discount. Mastic expects to sell the same quantity of marble tiles in 2017 as in 2016. If all other costs and cost-driver information remain the same, calculate Mastic's operating income for 2017. Suppose further that Mastic decides to make changes in its ordering and receiving-and-storing practices. By placing long-run orders with its key suppliers, Mastic expects to reduce the number of orders to 400 and the cost per order to $40 per order. By redesigning the layout of the warehouse and reconfiguring the crates in which the marble tiles are moved, Mastic expects to reduce the number of loads moved to 3,225 and the cost per load moved to $38. Will Mastic achieve its target operating income of $2.59 per tile in 2017? Show your calculations