Question 3: (24 marks) Toy Love is a manufacturer and wholesaler in the toy industry located across Australia. Toy Love has three customer categories: rural, suburban and urban according to their annual order size and sales volume. The company's senior manager has implemented a simple customer profitability analysis project. The following table show the results of the analysis: Rural Suburban Urban Total Sales revenue $2,801,800 $2,400,450 $3,750,000 $8,952,250 Direct costs of sales $1,540,987 $1,320,248 $2,250,000 $5,111,235 Use of product-related activities Number of orders received 80 68 53 201 Number of deliveries made 95 80 75 250 Indirect costs and their cost drivers are defined in the table below: Estimated indirect costs Activity cost pool Cost driver Orders filling costs Number of orders $630,000 Distribution-related costs Number of deliveries $1,020,000 Marketing/promotion/sales Sales dollars $1,250,000 Administration-related costs Number of deliveries $698,000 Required: a. Using the activity analysis results, assign the activity (indirect) costs to each of the three customer categories. [8 marks] Click or tap here to enter text. b. Calculate the profitability for each of the customer categories and draw an appropriate conclusion from your analysis. [10 marks] Hints: conduct a customer profitability analysis based on the above customer related indirect costs. Click or tap here to enter text. c. The senior management is concerned with the increasing competition in the toy industry. They have acknowledged that customer relationship management is very important for the company's competitiveness and growth. Based on your knowledge and the analysis above, advise the senior management on what strategic factors should be monitored in addition to the financial profitability analysis. [6 marks]