Cooler Master Inc. manufactures cooling units for commercial buildings. The price and cost of goods sold

for each unit are as follows:

In addition, the company incurs selling and administrative expenses of $$226,250.$ The company wishes to

assign these costs to its three major customers, Gough Industries, Breen Inc., and The Martin Group.

These expenses are related to three major nonmanufacturing activities: customer service, project

bidding, and engineering support. The engineering support is in the form of engineering changes that

are placed by the customer to change the design of a product. 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:

Provide a table for parts a and $b.$

a$.$ Determine the activity rates for each of the three nonmanufacturing activity pools.

b$.$ Determine the activity costs allocated to the three customers, using the activity rates in $($a$).$

c$.$ Construct customer profitability reports for the three customers, dated for the year ended

December $31,$ using the activity costs in $($b$).$ The reports should disclose the gross profit and

income from operations associated with each customer.

d$.$ Provide recommendations to management on how operations can be improved based on the

profitability reports in $($c$).$