Allocating selling and administrative expenses using activity$-$based costingShrute Inc. manufactures office copiers, which are sold to retallers. The price and cost of goods sold for each copier are as follows:Price$$750$ per unitCost of goods soldGross profit$(450)$$$300$ per unitIn addition, the company incurs selling and administrative expenses of $$280,660.$ The company wishes to assign these costs to its three major retall customers, The Warehouse, Kosmo Co$.,$ and Supply Universe. These expenses are related to its three major nonmanufacturing activities: customer service, sales order processing, and advertising support. The advertising support is in the form of advertisements that are placed by Shrute Inc. to support the retailer's sale of Shrute copiers to consumers. The budgeted activity costs and activity bases associated with these activities are:Activity$-$base usage and unit volume information for the three customers is as follows:ActivityBudgetedActivity CostActivity BaseCustomer service$$43,960$Number of service requestsSales order processing$34,200$Number of sales ordersAdvertising support$202,500$Number of ads placedTotal activity cost$$280,660$TheWarehouseKosmo Co$.$SupplyUniverse TotalNumber of service requests$6010210280$Number of sales orders$270110570950$Number of ads placed$2020110150$Unit volume$7007007002,100$Required:$1.$ Determine the activity rates for cach of the three nonmanufacturing activities. Round to the nearest whole dollar.Activity RateCustomer Serviceper serv. regSales Order Processingper sis. orderAdvertising Supponper ad$2.$ Determine the activity costs allocated to the three customers, using the activity rates in $(1).$Activity CostsThe WarehouseKosmo Co$.$Supply Universe$3.$ Construct customer profitability reports for the three customers, dated for the year ended December $31,$ using the activity costs in $(2).$ The reports should disclose the gross profit and operating income assoclated with each customer.Shrute Inc.Customer Profitability ReportFor the Year Ended December $31$The WarehouseKosmo Co$.$Supply UniverseDescriptionRevenuesCost of goods soldGross profitSelling and administrative activities:Customer serviceSales order processingAdvertising supportTotal selling and administrative