Pharmassist, Inc., a distributor of special pharmaceutical products, operates at capacity and has three main market segments. Rick Flair, the new controller of Pharmassist, reported the following data for 2020. E: (Click the icon to view the data.) For many years, Pharmassist 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 Pharmassist 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 2020 is as follows: (Click the icon to view the activity level and cost information.) Read the requirements Requirement 1. Compute the 2020 gross-margin percentage for each of Pharmassist's three market segments. (Enter the percent to two decimal places.) Gross margin percentage Supermarket Chains Pharmassist, Inc., a distributor of special pharmaceutical products, operates at capacity and has three main market segments. Rick Flair, the new controller of Pharmassist, reported the following data for 2020. (Click the icon to view the data.) For many years, Pharmassist 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 Pharmassist to analyze and allocate "other operating costs." E: (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 2020 is as follows: (Click the icon to view the activity level and cost information.) Data Table Requirement 1. Compute the 2020 gross-margin perce Supermarket Chains Pharmassist 2020 General Supermarket Drugstore Mom-and-Pop Chains Chains Single Stores Pharmassist $ 3,704,000 $ 3,145,000 $ 1,988,000 $ 8,837,000 3,612,000 2,990,000 1,804,000 8,406,000 Revenues Cost of goods sold $ 92.000 $ 155.000 $ 184,000 Gross margin 431.000 313,075 Other operating costs Operating income $ 117,925 Print Done Help Me Solve This e Text Pages Clear All Check Answer Pharmassist, Inc., a distributor of special pharmaceutical products, operates at capacity and has three main market segments. Rick Flair, the new controller of Pharmassist, reported the following data for 2020. (Click the icon to view the data.) For many years, Pharmassist 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 Pharmassist 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 2020 is as follows: Click the icon to view the activity level and cost information.) Data Table Requirement 1. Compute the 2020 gross-margin per Supermarket Chains 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 Pharmassist: 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. Pharmassist'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 Pharmassist for this activity Help Me Solve This e Text Pages Clear All Check Answer Print Done Pharmassist, Inc., a distributor of special pharmaceutical products, operates at capacity and has three main market segments. Rick Flair, the new controller of Pharmassist, reported the following data for 2020. F: (Click the icon to view the data.) For many years, Pharmassist 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 Pharmassist 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 2020 is as follows: B Click the icon to view the activity level and cost information.) Data Table Requirement 1. Compute the 2020 gross-marg Activity Level Activity-based Cost Data Pharmassist 2020 Supermarket Chains General Mom-and- Total Cost Supermarket Chains Drugstore Chains Pop Single Stores 1,800 $ of Activity in 2020 87,500 200 500 2.100 4.800 15,600 Activity Orders processed (number) Line-items ordered (number) Store deliveries made (number) Cartons shipped to stores (number) Shelf stocking (hours) 67,500 67,620 110 280 990 34,000 23,000 23,000 80,000 310 210 95 10,455 $ 313,075 Total Help Me Solve This e Text Page Clear All Check Answer Print Done Pharmassist, Inc., a distributor of special pharmaceutical products, operates at capacity and has three main market segments. Rick Flair, the new controller of Pharmassist, reported the following data for 2020. E: (Click the icon to view the data.) For many years, Pharmassist 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 Pharmassist 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 2020 is as follows: (Click the icon to view the activity level and cost information.) Requirements Requirement 1. Compute the 2020 gross-margin percentage 1. Supermarket Chains 2. 3. Compute the 2020 gross-margin percentage for each of Pharmassist'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 $313,075 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? 4. Print Done Help Me Solve This e Text Pages Get More Help Clear All Check
