Construct and Interpret a Product Profitability Report, Allocating Selling and Administrative Expenses Naper Inc manufactures power equipment. Naper has two primary products-generators and air compressors. The following report was prepared by the controller for Naper's senior marketing rm Generators Air Compressors Total Revenue Cost of goods sold Gross profit Selling and administrative expenses Income from operations The marketing management team was concerned that the selling and administrative expenses were not traced to the products. Marketing management believed than did other products. To verify this, the controller was asked to prepare a complete product profitability report, using activity-based costing. $1,796,440 $2,752,720 $4,549,160 3,411,870 110$688,180 $1,137,290 246,690 1,347,330 2,064,540 $449,110 The controller determined that selling and administrative expenses consisted of two activities: sales order processing and post-sale customer service. The controller was able to determine shown below. Activity Sales order processing Post-sale customer service Service requests $270 per customer service request The controller determined the following activity-base usage information about each product Activity Base Activity Rate Sales orders $90 per sales order Generators Air Compressors Number of sales orders Number of service requests a. Determine the activity cost of each product for sales order processing and post-sale customer service activities. 398 840 67 434 Sales Order Processing Post-sale Customer Service Ail work saved