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repared by the controller for Naper's senior marketing management for the year ended December 31: Air Generators Compressors Total Revenue $4,200,000 $3,000,000 $7,200,000 Cost of
repared by the controller for Naper's senior marketing management for the year ended December 31: Air Generators Compressors Total Revenue $4,200,000 $3,000,000 $7,200,000 Cost of goods sold 2,940,000 2,100,000 5,040,000 Gross profit $1,260,000 $900,000 $2,160,000 Selling and administrative expenses 610,000 Income from operations $1,550,000 The marketing management team was concerned that the selling and administrative expenses were not traced to the products. Marketing management believed that some products consumed larger amounts of selling and administrative expense than did other products. To verify this, the controller was asked to prepare a complete product profitability report, using activity-based costing. The controller determined that selling and administrative expenses consisted of two activities: sales order processing and post-sale customer service. The controller was able to determine the activity base and activity rate for each activity, as follows: Activity Activity Base Activity Rate Sales order processing Sales orders $65 per sales order Post-sale customer service Service requests $200 per customer service request The controller determined the following activity-base
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