(LO 10-4) 10-59. Customer Profitability Carmel Company has a frequent buyer program for its customers, where the customers can attain an "elite" level based on the number of orders and the total revenue of the orders. There are two 10 Management clite levels: Platinum and Titanium. The benefits of elite membership include discounts and access special customer service representatives who can resolve problems. The company has one full- time customer representative per 200 Titanium customers and one full-time customer representa- 2 percent of customer gross margin. Carmel spends 70 percent of its promotion costs on Titanium tive per 2,000 Platinum customers. Customer representatives receive salaries plus bonuses of customers to encourage their loyalty. Customer Costs Total Titanium Platinum 30,000 Number of customers... Average customer representative salary Promotion costs..... Average gross margin per customer. 6,000 24,000 $60,000 $60,000 $2,000,000 $ 1,500 $ 280 Required 4. What is the excess of gross margin over customer costs for each category of customer? b. Write a short memo that evaluates customer profitability. a