Assume Samsung uses activity-based costing to allocate customer support costs to products. For two of its laptop models, assume the company reports the data below. The Galaxy Book S sells for $1,000 per unit and the Galaxy Book Flex sells for $900 per unit.

Required

1. Compute the activity rate for the customer support cost for each laptop model.

2. Prepare a customer profitability report for each laptop model for (a) an order for 500 S models from a local college and (b) an order for 500 Flex models from a local hospital. The company budgets 500 support calls for both orders.

3. Which order, for Galaxy Book S or Galaxy Book Flex, earns the most income?

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Product Cost per Unit Direct materials.. Direct labor Overhead.. Total product cost Galaxy Book S $520 60 120 $700 Galaxy Book Flex $390 50 140 $580 Customer Support Annual costs Annual number of calls. Galaxy Book S $650,000 10,000 Galaxy Book Flex $950,000 10,000