Harvey Farm Juice is a fruit juice wholesaler supplying to a range of different customers. With concerns about sources of profitability from these different customers, Harvey Farm has embarked on a relatively simple customer analysis exercise. In the first instance, customers are classified as supermarkets, juice bars and individual sale. The results of this analysis are provided in the following table.

Sales in Units by customer Category
	Supermarket	Juice bar	Individual	Total
Sales revenue	$2,600,000	$1,750,000	$1,450,000	$5,800,000
Cost of sales	$1,550,000	$885,000	$870,000	$3,305,000
Gross Profit	$1,050,000	$865,000	$580,000	$2,495,000
Activities costs:
Order filling costs	Assigned based on number of orders	$433,000
Distribution-related costs	Assigned based on number of deliveries	$840,000
Marketing/Promotion/sales	Assigned on sales dollars	$945,000
Administration-related costs	Assigned on number of deliveries	$466,000
Total expenses				$2,684,000
Profit (Loss)				-$189,000
Cost Driver:
No. of order received	40	46	82	168
No. of deliveries made	55	65	105	225

Required:

Using the the activity-based costing (ABC) approach:

1. Calculate the activity cost rate for each activity.
2. Assign the activity costs to each of the three (3) customers.
3. Calculate the contribution for each customer category.
4. Advise the management of Harvey Farm Juice as to whether any changes should be made in its relationships with customers. Advise the management as to how they should go about executing these changes?