(56) Penlico Plumbing Supplies (PPS) manufactures and sells a wide range of plumbing products (e.g., valves, pumps, flow controllers etc.). Recently the financial analyst at PPS decided to trial a customer profitability system. His first step was to determine the main activities that PPS engages in to manage its relationships with its customer, by speaking with the sales, production and delivery logistics departments. From these discussions, he learned that once a customer places an order for different plumbing products the items need to be picked from the finished goods warehouse and packed for delivery. For most customers, multiple cartons need to be prepared for delivery. He called this first activity Processing Cartons. The next activity is Delivery Orders, which involves delivering the packed cartons to the customers premises. Finally, he also learned that a significant amount of time is spent answering customer queries about PPSs products; he called this final activity Answering Queries

The financial analyst then created a table of activities, the total activity costs, the chosen drivers, and driver amounts from the most recent fiscal year:

Activity	Activity Costs	Driver	Driver Amount
Processing Cartons	$3,870,000	# Cartons Processed	150,000 cartons
Delivering Orders	$1,107,500	# Deliveries	25,000 deliveries
Answering Queries	$142,000	# Queries	10,000 queries

The financial analyst collected the following information for two customers:

		Freds Hardware		PlumbingIsUs
Revenue		$150,000		$600,000
COGS		($120,000)		($480,000)
Gross Margin		$30,000		$120,000
# Cartons Process		1,000		4,000
# Orders Delivered		250		250
# Customer Queries		100		50

Determine the customer profitability of Freds Hardware and the customer profitability of PlumbingIsUs.