Wholesale Customers		Retail Customers
	North America Wholesaler	South America Wholesaler	Green Energy	Global Power
Revenues at list prices	$425,000	$630,000	$165,000	$110,000
Discounts from list prices	25,000	43,000	7,400	500
Cost of goods sold	320,000	485,000	118,000	98,000
Delivery costs	400	630	190	115
Order processing costs	700	1,040	235	130
Cost of sales visit	5,800	5,400	2,100	1,500

Hanson - Tech has only two retail and two wholesale customers. Information relating to each customer for 2020 follows (in thousands): (Click the icon to view the data.) Hanson - Tech's annual distribution-channel costs are $35 million for wholesale customers and $10 million for retail customers. The company's annual corporate-sustaining costs, such as salary for top management and general-administration costs, are $63 million. There is no cause-and-effect or benefits-received relationship between any cost-allocation base and corporate-sustaining costs. That is, Hanson - Tech could save corporate-sustaining costs only if the company completely shuts down. Read the Requirement 1. Calculate customer-level operating income. Begin by calculating each customer's gross margin. Then calculate the operating income for each customer. (Enter amounts in thousands.) what actions, if any, should Hanson - Tech's managers take? Explain. (Enter amounts in thousands.) If corporate costs are allocated to the channels, the retail channel will show an operating of (in thousands), and the wholesale channel will show an operating of (in thousands). The overall operating profit On the basis of the calculations above, what actions, if any, should Hanson - Tech's managers take? Explain. There is (19) cause-and-effect or benefits-received relationship between corporate costs and any allocation base. Therefore, the management of Hanson - Tech Electronics (20) base any performance evaluations or investment/disinvestment decisions based on these channel-level operating income numbers. Requirement 4. How might Hanson - Tech use the new cost information from its activity-based costing system to better manage its business? Hanson - Tech could use activity-based cost information to better manage its business by (21) and determining which activities are (22) If costs of sales visits for the North America Wholesale are $5,800, which is greater than the cost for the South America Wholesaler, Hanson-Tech should evaluate the (23) of this activity for this customer group