Customer profitability analysis, original ABC

Kronecker Company, a growing mail$-$order clothing and accessory company, is concerned about its growing MSDA expenses. It$,$ therefore, examined its customer ordering patterns for the

past year and identified four types of customers, as illustrated in the following table. Kronecker sends catalogs and flyers to all its customers several times a year. Orders are taken by mail

or over the phone. Kronecker maintains a toll$-$free number for customers to use when placing orders over the phone. Kronecker prides itself on the personal attention it provides

shoppers who order over the phone. All purchases are paid for by check or credit card. Kronecker has a very generous return policy if customers are not satisfied with the merchandise

received. Customers must pay return shipping charges, but their purchase price is then fully refunded.

Prices are set so that cost of goods sold averages about $75\%$ of the sales price. Customers pay actual shipping charges, but extra processing is required for overnight deliveries. Kronecker

has developed the following activity cost driver rates for its support costs:

$($a$)$ Using ABC, determine the yearly profit associated with each of the four customers described.

Note: Throughout all calculations, round each calculated item to two decimal points $($i$.$e$.$ show $.445$ as $\mathrm{.}45).$