Medassist, Inc , a distributor of special pharmaceutical products, operates at capacity and has three main market segments Rick Flair, the new controller of Medassist, reported the following data for 2017 Medassist 2017 General Supermarket Chains Drugstore Chains Mom and Pop Single Stores Medassist Revenues $3,716,000 $3,190,000 $1,990,000 $8,896,000 Cost of goods sold 3,614,000 3,025,000 1,812,000 8,451,000 Gross margin $102,000 $165,000 $178,000 445,000 Other operating costs 303,160 Operating income $141,840 For many years, Medassist has used gross margin percentage to evaluate the relative profitability of its market segments But Flair recently attended a seminar on activity based costing and is considering using it at Medassist to analyze and allocate other operating costs He meets with all the key managers and several of his operations and sales staff, and they agree that there are five key activities that drive other operating costs at Medassist Activity Area Cost Driver Order processing Number of customer purchase orders Line item processing Number of line items ordered by customers Delivering to stores Number of store deliveries Cartons shipped to store Number of cartons shipped Stocking of customer store shelves Hours of shelf stocking Each customer order consists of one or more line items A line item represents a single product (such as Extra Strength Tylenol Tablets) Each product line item is delivered in one or more separate cartons Each store delivery entails the delivery of one or more cartons of products to a customer Medassist's staff stacks cartons directly onto display shelves in customers' stores Currently, there is no additional charge to the customer for shelf stocking and not all customers use Medassist for this activity The level of each activity in the three market segments and the total cost incurred for each activity in 2017 is as follows Activity based Cost Data Activity Level Medassist 2017 General Mom and Total Cost Supermarket Drugstore Pop Single of Activity Activity Chains Chains Stores in 2017 Orders processed (number) 225 425 1,750 $93,600 Line items ordered (number) 2,000 5,000 16,000 46,000 Store deliveries made (number) 150 250 1,040 76,320 Cartons shipped to stores (number) 37,000 27,000 13,000 77,000 Shelf stocking (hours) 360 180 100 10,240 Total $303,160 Requirement 1 Compute the 2017 gross margin percentage for each of Medassist's three market segments (Enter the percent to two decimal places ) Gross Margin Revenue Gross margin percentage Supermarket Chains $ $ Drugstore Chains Mom and pop Stores Requirement 2 Compute the cost driver rates for each of the five activity areas (Round activity rates to three decimal places, X XXX ) Begin by selecting the formula you will use Then calculate the rate for each activity area and determine the allocation base Activity Cost Total quantity of allocation base Activity Rate Order processing $ $ per order Line item processing $ $ per line item Delivering to store $ $ per delivery Carton shipped to store $ $ per carton Stocking of store shelves $ $ per hour Requirement 3 Use the activity based costing information to allocate the $315,505 of other operating costs to each of the market segments Compute the operating income (loss) for each market segment Activity General Supermarket Chains Drugstore Chains Mom and Pop Single Stores Customer order processing $ $ $ Line item processing Store delivery Cartons shipped Shelf Stocking Total Costs $ $ $ Compute the operating income for each market segment (Use parenthesis or a minus sign when entering operating losses ) Pharmassist 2017 General Supermarket Chains Drugstore Chains Mom and Pop Single Stores Total Cost of Activity in 2017 Revenues $ $ $ $ Cost of goods sold Gross margin Other operating costs Operating income (loss) $ $ $ $ Requirement 4 C alculate the operating income (loss) percentage for each marketing segment First select the formula labels and then calculate the percentage (Enter the percent to two decimal places Use parentheses or a minus sign when entering operating losses ) Operating Income (Loss) Revenue Operating Income (Loss) Percentage Supermarket Chains $ $ Drugstore Chains Mom and Pop Stores

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Medassist, Inc., a distributor of special pharmaceutical products, operates at capacity and has three main market segments. Rick Flair, the new controller of Medassist, reported

Medassist, Inc., a distributor of special pharmaceutical products, operates at capacity and has three main market segments. Rick Flair, the new controller of Medassist, reported the following data for 2017:

Medassist 2017	General Supermarket Chains	Drugstore Chains	Mom-and-Pop Single Stores	Medassist
Revenues	$3,716,000	$3,190,000	$1,990,000	$8,896,000
Cost of goods sold	3,614,000	3,025,000	1,812,000	8,451,000
Gross margin	$102,000	$165,000	$178,000	445,000
Other operating costs				303,160
Operating income				$141,840

For many years, Medassist has used gross margin percentage to evaluate the relative profitability of its market segments.

But Flair recently attended a seminar on activity-based costing and is considering using it at Medassist to analyze and allocate "other operating costs."

He meets with all the key managers and several of his operations and sales staff, and they agree that there are five key activities that drive other operating costs at

Medassist:

Activity Area	Cost Driver
Order processing	Number of customer purchase orders
Line-item processing	Number of line items ordered by customers
Delivering to stores	Number of store deliveries
Cartons shipped to store	Number of cartons shipped
Stocking of customer store shelves	Hours of shelf-stocking

Each customer order consists of one or more line items. A line item represents a single product (such as Extra-Strength Tylenol Tablets). Each product line item is delivered in one or more separate cartons. Each store delivery entails the delivery of one or more cartons of products to a customer. Medassist's staff stacks cartons directly onto display shelves in customers' stores. Currently, there is no additional charge to the customer for shelf-stocking and not all customers use Medassist for this activity.

The level of each activity in the three market segments and the total cost incurred for each activity in 2017 is as follows:

Activity-based Cost Data	Activity Level
Medassist 2017	General		Mom-and-	Total Cost
	Supermarket	Drugstore	Pop Single	of Activity
Activity	Chains	Chains	Stores	in 2017
Orders processed (number)	225	425	1,750	$93,600
Line-items ordered (number)	2,000	5,000	16,000	46,000
Store deliveries made (number)	150	250	1,040	76,320
Cartons shipped to stores (number)	37,000	27,000	13,000	77,000
Shelf stocking (hours)	360	180	100	10,240
Total				$303,160

Requirement 1. Compute the 2017 gross-margin percentage for each of Medassist's three market segments. (Enter the percent to two decimal places.)

	Gross Margin	/	Revenue	=	Gross margin percentage
Supermarket Chains	$	/	$	=	%
Drugstore Chains		/		=
Mom-and-pop Stores		/		=

Requirement 2. Compute the cost driver rates for each of the five activity areas. (Round activity rates to three decimal places, X.XXX.)

Begin by selecting the formula you will use. Then calculate the rate for each activity area and determine the allocation base.

	Activity Cost	/	Total quantity of allocation base	=	Activity Rate
Order processing	$	/		=	$	per order
Line-item processing	$	/		=	$	per line item
Delivering to store	$	/		=	$	per delivery
Carton shipped to store	$	/		=	$	per carton
Stocking of store shelves	$	/		=	$	per hour

Requirement 3. Use the activity-based costing information to allocate the $315,505 of "other operating costs" to each of the market segments. Compute the operating income (loss) for each market segment.

Activity	General Supermarket Chains	Drugstore Chains	Mom-and-Pop Single Stores
Customer order processing	$	$	$
Line-item processing
Store delivery
Cartons shipped
Shelf Stocking
Total Costs	$	$	$

Compute the operating income for each market segment. (Use parenthesis or a minus sign when entering operating losses.)

Pharmassist 2017	General Supermarket Chains	Drugstore Chains	Mom-and-Pop Single Stores	Total Cost of Activity in 2017
Revenues	$	$	$	$
Cost of goods sold
Gross margin
Other operating costs
Operating income (loss)	$	$	$	$

Requirement 4. Calculate the operating income (loss) percentage for each marketing segment. First select the formula labels and then calculate the percentage. (Enter the percent to two decimal places. Use parentheses or a minus sign when entering operating losses.)