Problem (2 Daton distribution has decided to analyses the profitability of five customers. Daton buys water at $ .50 per bottle and sells to wholesale customers at a list price of$ 0.60 per bottle. Data pertaining to the four customers as follow: 50,000210.0001.460,00094,000 $.60 $.60 Bottle sold List selling price Actual selling price No. of purchase order No, of sales visits No. of delivers Km travelled / delivery No. of hot-hot runs $.60 .59 25 .60 $.55 30 $.60 $.54 30 20 40 30 60 14 Most of Daton activities are classified as batch level activities except those activities that can be considered as unit level activities. Daton's activities and cost driver rates are as follows: Activities Order taking Sales visits Delivery vehicles Product handling Hot-hot runs Cost driver rate $100 / purchase order $80/ sale visit $2 / delivery of Km travelled $0.02/ bottle sold $300 / hot-hot run Required 1. Calculate the gross margin for each of the four customers. 2. Calculate the operating profit for each of the four customers based on Daton's activities 3. Comment on customers' profitability. 4. P has doubled his demand. However, Daton's top management reports show that the maximum capacity of the batch level activities is up to 55.000 units per batch. Calculate P's contribution to Daton profits. 5. Q has approached Daton offering to purchase additional 90,000 bottles at the same price list per bottle without any discount. Given Daton current commitments, Daton's batch level activities maximum capacity is 40,000 bottles. Would Daton accept Q offer? Why? (note that batch capacity can not be divided)