Your comparison of the gross margin percent for Jackels Drugs for the years 2013 through 2016 indicates a significant decline. This is shown by the following information: (Click the icon to view the information.) The following additional information is obtained from independent sources and the client's records as a means of investigating the controller's explanations: A (Click the icon to view the additional information.) Requirements a Evaluate the explanation provided by Avell. Show calculations to support your conclusions. b Which specific aspects of the client's financial statements require intensive investigation in this audit? Requirement a. Evaluate the explanation provided by Avell. Show calculations to support your conclusions. First, compute the gross margin percentage for drug sales for 2016 through 2013, then compute the gross margin percentage for nondrug sales for 2016 through 2013. (Round your answers to the nearest tenth percent, XX.X%.) Drugs 2016 % % 2015 2014 2013 % % - X Data Table 2016 2015 2014 2013 $ s $ 15.100 9,543 13.750 8.580 12.300 7.628 11.200 6.922 Sales (thousands) CGS (thousands) Gross margin Percent $ 5,557 $ 5.170 $ 4.674 $ 4.278 38.2 36.8 37.6 38.0 A discussion with McKayla Avell, the controller, brings to light two possible explanations. She informs you that the industry gross profit percent in the retail drug industry declined fairly steadily for three years, which accounts for part of the decline. A second factor was the declining percent of the total volume resulting from the pharmacy part of the business. The pharmacy sales represent the most profitable portion of the business, yet the competition from discount drugstores prevents it from expanding as fast as the nondrug items such as magazines, candy, and many other items sold. Avell feels strongly that these two factors are the cause of the decline. Print Done - More Info Industry Gross Profit Percent for Retailers of Drugs and Related Products 34.2 34.3 Drug Sales 2010 $ Jackels Drugs ($ in thousands) Drug Cost of Nondrug Cost Nondrug Sales Goods Sold of Goods Sold 9.317 s 3.778 5 6,345 8.044 3,618 5.478 6.839 3.473 4.671 5.938 3,337 4.000 5.783 5.708 2015 2014 5.461 34.5 2013 5.264 34.7 Print Done