Lifetime Machines, a manufacturer of commercial-grade kitchen appliances, determined at the beginning of the year that $1,000,000 of budgeted selling and administrative overhead cost should be allocated to individual customers, to better facilitate the companys understanding of per-customer profitability.

The accounting staff determined that selling and customer support expenses related to the following four activity cost pools should be allocated to each customer:

Activity#	Activity	Cost Driver	Cost per Unit of Activity
1.	Sales visits	Number of visit days	$5,000
2.	Product adjustments	Number of adjustments	$1,000
3.	Phone and email contacts	Number of calls/contacts	$300
4.	Promotion and entertainment events	Number of events	$1,200

The following financial and activity data was accumulated on five customers over the course of the year:

Customer	Gross Profit	Activity 1	Activity 2	Activity 3	Activity 4
#1	$500,000	14	15	120	80
#2	$600,000	23	30	150	70
#3	$400,000	12	25	160	55
#4	$300,000	13	10	100	45
#5	$300,000	8	20	70	50
Total	$2,100,000	70	100	600	300

Compute the profitability of Customer 1 and 2: