Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers.

Colleen sells its products at $200 per unit. The firm's gross margin ratio is 25%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business intelligence software to carefully analyze the operating data for the past 30 months, the firm has determined the following activity costs:

Required
1. Classify activity costs into cost categories (unit, batch, etc.) and compute the total cost for Colleen Company to service Jerry Inc. and Kate Co.
2. Compare the profi tability of these two customers.

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Kate Co. 30 200 Jerry Inc. Number of orders Units per order Sales returns: 1,000 Number of returns Total units returned Number of sales calls 175 40 12 Activity Sales calls Order processing Deliveries Sales returns Sales salary Cost Driver and Rate S 1,000 per visit 300 per order 500 per order 100 per return and $5 per unit returned 100,000 per month