Pharmacare, Inc., a distributor of special pharmaceutical products, operates at capacity and has three main market segments. Rick Flair, the new controller of Pharmacare, reported the following data for 2017: B (Click the icon to view the data.) For many years, Pharmacare has used gross margin percentage to evaluate the relative profitability of its market segments. But Flair recently attended a serinar on activity-based costing and is considering using it at Pharmacare to analyze and allocate "other operating costs." (Click the icon to view the activities and relevant information.) The level of each activity in the three market segments and the total cost incurred for each activity in 2017 is as follows: (Click the icon to view the activity level and cost information.) Read the requirements. Requirement 1. Compute the 2017 gross-margin percentage for each of Pharmacare's three market segments. (Enter the percent to two decimal places.) Gross margin percentage Supermarket Chains . - as he llow - Data table Requirements ead Activity Level 1. Activity-based Cost Data Pharmacare 2017 General Mom-and- Total Cost ber 2. Supermarket Drugstore Pop Single of Activity 3. Compute the 2017 gross-margin percentage for each of Pharmacare's three market segments. Compute the cost driver rates for each of the five activity areas. Use the activity-based costing information to allocate the $309,485 of "other operating costs" to each of the market segments. Compute the operating income for each market segment. Comment on the results. What new insights are available with the activity-based costing information? Activity Chains Chains Stores in 2017 200 400 1,600 $ 88,000 4. 2,000 5,000 14,250 63,750 100 325 Orders processed (number) Line-items ordered (number) Store deliveries made (number) Cartons shipped to stores (number) Shelf stocking (hours) 1,005 74,360 37,000 24,000 13,000 74,000 9,375 325 175 125 Print Done $ 309,485 Total Print Done - X Data table Data table Pharmacare 2017 General Supermarket Drugstore Mom-and-Pop Chains Chains Single Stores Pharmacare $ 3,720,000 $ 3.150.000 S 1,980,000 $ 8,850,000 3,612,000 3,000,000 1,798,000 8,410,000 Revenues Cost of goods sold $ 108,000 $ 150,000 S 182,000 Gross margin 440,000 309,485 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 Pharmacare: Activity Area Cost Driver Order processing Number of customer purchase orders Line iter 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. Pharmacare'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 Pharmacare for this activity Other operating costs $ 130,515 Operating income Print Done Print Done