Question 3: Evaluating customer profitability You own a credit card company. You want to evaluate the profitability of customers A and B. customer Acustomer B credit card balance $1,500 $600 number of transactions 150 60 number of customer-support calls 60 The only source of revenue from customers is the interest that you charge on credit card balances. You charge customers an interest rate of 40%. Thus, if the credit card balance is $1,000, revenue is $1000*0.4=$400. Variable costs are zero for simplicity. From your ABC system, the activity rates are $1 per transaction and $8 per customer-support call. a) Compute revenue, costs, and profit margin for each customer. customer A customer B Revenue $ Variable costs $ $ Contribution margin $ $ Allocated costs - transactions $ $ Allocated costs - customer supports Ils Profit margin $ lis Enter negative numbers with a minus sign, i.e., a loss of $200 should be entered as -200, not as (200) or ($200). b) One of the customers is unprofitable. What can you do about this customer? (select all that apply) increase the interest rate O "fire" the customer you cannot do anything -- regardless of what you do, about 40-50% of your customers will be unprofitable. That is just the cost of doing business. limit the number of free customer support calls