$($PLEASE ATTACH DETAILED CALCULATIONS WHEREVER APPLICABLE$)$

Q$-1$: Why was Dakota$$s existing pricing system inadequate for its current operating environment?

Q$-2$: Develop an activity$-$based cost system for Dakota Office Products $($DOP$)$ based on Year $2000$ data. Calculate the activity cost$-$driver rate for each DOP activity in $2000.$

Q$-3$: Using your answer to Question $2,$ calculate the profitability of Customer A and Customer B$.$

Q$-4$: What explains any difference in profitability between the two customers?

Q$-5$: What are the limitations$,$ if any, to the estimates of the profitability of the two customers?

Q$-6$: Is there any additional information you would like to have to explain the relative profitability of the two customers?

Q$-7$: Assume that Dakota applies the analysis done in Question $3$ to its entire customer base. How could such information help the Dakota managers increase company profits?

Q$-8$: Suppose that a major customer switched from placing all its orders manually to placing all its orders over the internet site. How should this affect the activity cost driver rates calculated in Question $2?$ How would the switch affect Dakota$$s profitability?