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.$)$

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.$)$

$\backslash$table$[[$Supermarket Chains,$$,$Gross margin,$,\backslash$table$[[$Revenue$],[3,704,000$

and has three main market segments. Rick Flair,

reported the following data for $2020$

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

Order processing

Line$-$item processing

Delivering to stores

Cartons shipped to store

Stocking of customer store shelves

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 this activity.

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 avallable with the activity$-$based costing information?

Data table

$\backslash$table$[[$Pharmassist $2020,,\backslash$table$[[$General$],[$Supermarket$],[$Chains$]],\backslash$table$[[$Drugstore$],[$Chains$]],\backslash$table$[[$Mom$-$and$-$Pop$],[$Single Stores$]],$Pharmassist$],[$Revenues$,s,3,704,000$$$,3,145,000,1,988,000,8,837,000$