Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers.

Jerry Inc. Kate Co.

Number of orders 4 60

Units per order 1,000 130

Sales returns:

Number of returns 2 3

Total units returned 40 200

Number of sales calls 13 4

Colleen sells its products at $190 per unit. The firm's gross margin ratio is 25%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business intelligence software to carefully analyze the operating data for the past 30 months, the firm has determined the following activity costs:

Activity Cost Driver and Rate

Sales calls $ 800per visit

Order processing 490per order

Deliveries 500per order

Sales returns 210per return and $5 per unit returned

Sales salary 109,000per month

Required:

1.Classify activity costs into cost categories (unit, batch, etc.) and compute the total cost for Colleen Company to service Jerry Inc. and Kate Co.

2.Compare the profitability of these two customers.(Loss amounts should be indicated by a minus sign.Round operating margin (loss) to 2 decimal places (i.e. .2134 should be entered as 21.34%).)

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Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry Inc. Kate Co. Number of orders 4 60 Units per order 1,000 130 Sales returns: Number of returns 2 3 Total units returned 40 200 Number of sales calls 13 4 ' Colleen sells its products at $190 per unit. The rm's gross margin ratio is 25%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business intelligence software to carefully analyze the operating data for the past 30 months, the rm has determined the following activity costs: Activity Cost Driver and Rate Sales calls 95 800 per visit Order processing 490 per order Deliveries 500 per order Sales returns 210 per return and $5 per unit returned Sales salary 109,000 per month Required: 1. Classify activity costs into cost categories (unit, batch, etc.) and compute the total cost for Colleen Company to service Jerry Inc. and Kate Co. Customer batch level costs: _ __ 2. Compare the protability of these two customers. (Loss amounts should be indicated by a minus sign. Round operating margin (loss) to 2 decimal places (Le. .2134 should be entered as 21.34%).) Operating income (loss) _-_I Operating margin 053)