All your answers will automatically save as you proceed through the test. X The performance reports in the last quarter revealed that the profit margin in the market of single-store pharmacies has been declining and the management would like examine individual customer profitability in order to make further sales and marketing decisions in that market. The CEO has recently attended a seminar on activity-based costing (ABC) and is considering using it to analyse customer profitability. After meeting with all the relevant managers, the following five major activities that drive customer costs and the cost driver rates are identified: Activity Area Cost Driver Rate Order processing $40 per order Line-item ordering $4 per line item Store deliveries $50 per store delivery Carton deliveries $2 per carton Shelf-stocking $15 per stocking-hour Two customers are selected for the pilot analysis using the ABC approach. Data pertaining to these two customers in the last month are as follows: Customer A Customer B Number of orders 14 11 Average line items per order 9 17 Total store deliveries 8 10 Average cartons shipped per store delivery 22 21 Average hours of shelf-stocking per store delivery 0.5 Average revenue per delivery $2,500 $2,100 Average cost of goods sold per delivery $2,200 $1,900