Wingo Widgets makes and sells widgets to individual and corporate customers. Widgets cost $4.25 to make and are sold for $6.00 each. Individual customers typically require little service beyond order processing. Because widgets don’t differ much from one producer to the next, corporate customers demand additional services before they will commit to a purchase. Wingo’s selling activities and cost pools are as follows:

The following table compares the activity level for the average individual customer and average corporate costumer:

Required

a. Calculate the activity rate for each cost pool.

b. Calculate the customer net profit and customer profit margin for the average individual customer and the average corporate customer.

c. If Wingo wanted to drop one average corporate customer, how many average individual customers would need to be added to make up the lost customer profit?

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Cost Pool Annual Cost Annual Driver Activity Order processing Telephone technical support $250,000 2,000 orders 72,000 3,000 hours Product demonstrations 49,000 100 demonstrations Express deliveries 42,000 300 deliveries $413,000