Gaston Inc. is a small distributor of mechanical pencils. Gaston identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2019: First, determine the selling price to retailers in 2020. The selling price per pack to retailers in 2020 is $ 7.60 Now determine the purchase price per packs of pencils in 2020. The purchase price per pack in 2020 is $ 3.84 Now that we have determined the new selling price and purchase price for 2020, determine the operating income for 2020. Then, calculate the per unit amounts for 2020. (Round the per unit amounts to the nearest cent.) Revenues Costs: Purchase cost of pencil packs Ordering costs Receiving and storage Shipping Total costs Operating income Total work Inc. is a s ng and stor lick the icor lick the icor the require Requirement If all other costs and cost-driver information remain the same, by how much must Gaston reduce its total cost and cost per unit if it is to earn the same target operating income in 2020 as it earned in 2019 (and thereby earn its required rate of return on investment)? Print Done etermine elling pric etermine urchase at we ha te the pe For 2019, Gaston buys 250,000 pencil packs at an average cost of $4 per pack and sells them to retailers at an average price of $8 per pack. Assume Gaston has no fixed costs and no inventories. For 2020, retailers are demanding a 5% discount off the 2019 price. Gaston's suppliers are only willing to give a 4% discount. Gaston expects to sell the same quantity of pencil packs in 2020 as it did in 2019. ues chase cost of pencil packs dering costs ceiving and storage ipping otal costs ting income Data table Print Done Total Per Unit $ 2,000,000 $ 8.00 Revenues Costs: Purchase cost of pencils 1,000,000 $ 4.00 Ordering costs 50,000 $ 0.20 Receiving and storage 300,000 $ 1.20 120,000 $ 0.48 Shipping 1,470,000 $ 5.88 Total costs $ 530,000 $ 2.12 Operating income Activity 1. Placing and paying for orders of pencil packs 2. Receiving and storage 3. Shipping of pencil packs to retailers Print Done Cost Driver Quantity of Cost per Unit of Cost Cost Driver Driver Number of orders Loads moved 500 5,000 $100 per order $60 per load Number of shipments 1,500 $80 per shipment x