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		5			30
Units per order		1,000			200
Sales returns:
Number of returns		2			5
Total units returned		40			175
Number of sales calls		12			4

Colleen sells its products at $200 per unit. The firms gross margin ratio is 25%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business analytics 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	$	1,000	per visit
Order processing		300	per order
Deliveries		500	per order
Sales returns		100	per return and $5 per unit returned
Sales salary		100,000	per month

Required:

1. Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Inc. and Kate Co.

2. Compare the profitability of these two customers.

Requiremtn 1

Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Inc. and Kate Co.

	Jerry Inc.	Kate Co.
Customer unit level costs:
	$200	$875
Customer batch level costs:
Customer sustaining costs:
	12,000	4,000
Total	$12,200	$4,875

Requiremtn 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%).)

	Jerry Inc.		Kate Co.
Net sales	$0		$0
	$0		$0
Operating income (loss)
Operating margin (loss)		%		%