Assume Apple uses activity-based costing to allocate customer support costs to products. For a MacBook Pro model, assume Apple budgets annual customer support costs of $850,000. Also assume Apple budgets 10,000 customer support calls per year for that model. Assumed product cost data for the MacBook Pro model follow.

Required

1. Compute the activity rate for the customer support cost.

2. Prepare a customer profitability report for an order from a local college for 500 MacBook Pros. Each unit sells for $1,199. Apple budgets 500 support calls for this order.

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Product Cost Direct materials.... Direct labor.... Overhead.... Total product cost Per unit $490 60 265 $815