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Boston Depot sells office supplies to area corporations and organizations. The business cents to be a busy as ever. Yet, the operating income las been declining. To help identify the root cause of declining profits, the firm decided to malyze the profitabilus of two of the tim's major customers Omega lotemational (Oland City of Albion (CA), According to the customer profitability analysis that Boston Depot conducts regularly. Boston Depot has the same total sales with both of wond CA, US demonstrated here Customer Profitability Analysis Omega International City of Allan Sales $80.000 580.000 Direct product cost 50.000 48.000 Gross margin $30,000 $32,000 Boston Depot also has service expenses incurred in such activities as handling customers' requests, pick-packing, onder delivery, warehousing, und data entry. The following data about the two castomers is provided: Distribution Services Activities for OL and CA CA Number of requisition 300 700 Requisition line (all pick packing) 900 2.100 Average number of cutons in warehouse 50 500 Number of miles per delivery The controller has been investigating ways to determine the costs of performing various activities. He sumumanized his findings Total Estimated Estimated Ausual Activity Annual Expense Cost Driver Activity Love $3.000.000 Requisitions handling Requisitions 300,000 1,050.000 Warehouse 70,000 Number of cartons 900,000 Pick packing 600.000 Pick-pack lines 600,000 Data entry 600.000 Pick packie Delivery charge $10 per requisition (delivery) phuo 5030 por muito OI 5 6 ba 1.1f Boston Depot uses a standard cate of service expenses as 17.3% of sales to determine customer margins, which customer is more profitable? Besides, do you think this is a good way to determine customer profitability? Why? (points) 2. Using activity-based costing compute the customer margins for each of the customers (6 points)