esign Layout References Mailings Review View Help Search 1 LEARNING ACTIVITY 3 Veritek Wholesalers operates at capacity and sells furniture items to four department-store chains (customers). Mr. Veritek commented, "We apply ABC to determine product-line profitability. The same ideas apply to customer profitability, and we should find out our customer profitability as well." Veritek Wholesalers sends catalogs to corporate purchasing departments on a monthly basis. The customers are entitled to return unsold merchandise within a six-month period from the purchase date and receive a full purchase price refund. The following data were collected from last year's operations: Customer 2 3 4 Gross sales $40.000 $20,000 $110,000 $95,000 Sales returns: Number of items 96 24 64 32 Amount $ 8,000 $ 3.000 $ 7,700 $ 9,000 Number of orders Regular 30 140 55 100 Rush 8 46 12 Veritek has calculated the following activity rates: Activity Cost Driver Rate Regular order processing 5:30 per regular order Rush order processing $150 per rush order Returned items processing $15 per item Catalogs and customer suppon $1,200 per customer 45 REQUIRED Customers pay the transportation costs. The cost of goods sold averages 75% of gross sales. Determine the contribution to profit from each customer last year. Comment on your solution