Pagnol-Carrelages SNC is a small distributor of marble tiles. Pagnol-Carrelages identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and reports the following details for 2007:

Required
1. Calculate Pagnol-Carrelages' operating profit for 2007.
2. For 2008, retailers are demanding a 5% discount off the 2007 price. Pagnol-Carrelages' suppliers are only willing to give a 4% discount. Pagnol-Carrelages expects to sell the same quantity of marble tiles in 2008 as it did in 2007. If all other costs and cost driver information remain the same, what will Pagnol-Carrelages' operating profit be in 2008?
3. Suppose further that Pagnol-Carrelages decides to make changes in its ordering, and receiving and storing practices. By placing long-term orders with its key suppliers, it expects to reduce the number of orders to 200 and the cost per order to ‚¬25. By redesigning the layout of the warehouse and reconfiguring the crates in which the marble tiles are moved, Pagnol-Carrelages expects to reduce the number of loads moved to 3125 and the cost per load moved to ‚¬28. Will Pagnol-Carrelages achieve its target operating profit of ‚¬0.30 per tile in 2008? Show your calculations.

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Quantity of cost driver Cost per unit of cost driver 500 4000 1500 Cost driver 50 per order 630 per load 40 per shipment Activity Number of orders 1. Placing and paying for orders of marble tiles 2. Receiving and storage Number of loads moved 3. Shipping of marble tiles Number of to retailers shipments