Question 1: Managing Customers [15 marks] Question 1.1 Custom Course Packets has hired you to calculate the profitability of its three customer groups. Here are the revenues and directly traceable costs for each customer group: Individual Corporate University Total Customers Customers Customers Revenues $600,000 $750,000 $700,000 $2,050,000 Direct Costs $450,000 $562,500 $525,000 $1,537,500 In addition, there are $130,000 in costs that cannot be directly traced to the customer groups. You have decided to use activity-based costing to allocate the costs to each customer group. Here are the cost pools (along with the respective activity base) for the company as a whole: Activity Ordering costs Product design costs Customer service costs Cost Pool $80,000 $20,000 $30,000 Activity Base No. of customer orders No. of product designs No. of customer complaints Quantity 40,000 400 500 Below are the activity levels for each customer type: Individual Corporate University Customers Customers Customers No. of customer orders 30,000 15,000 13,000 No. of product designs 220 110 130 No. of customer complaints 250 150 190 Required: Question 1.1.1 Prepare a customer profitability analysis for each customer group and comment on their relative profitability. Word limit for later part: 100 words. Note the word count at the end of your answer] (6 marks) Your Answer (expand the space as required): Question 1: Managing Customers [15 marks] Question 1.1 Custom Course Packets has hired you to calculate the profitability of its three customer groups. Here are the revenues and directly traceable costs for each customer group: Individual Corporate University Total Customers Customers Customers Revenues $600,000 $750,000 $700,000 $2,050,000 Direct Costs $450,000 $562,500 $525,000 $1,537,500 In addition, there are $130,000 in costs that cannot be directly traced to the customer groups. You have decided to use activity-based costing to allocate the costs to each customer group. Here are the cost pools (along with the respective activity base) for the company as a whole: Activity Ordering costs Product design costs Customer service costs Cost Pool $80,000 $20,000 $30,000 Activity Base No. of customer orders No. of product designs No. of customer complaints Quantity 40,000 400 500 Below are the activity levels for each customer type: Individual Corporate University Customers Customers Customers No. of customer orders 30,000 15,000 13,000 No. of product designs 220 110 130 No. of customer complaints 250 150 190 Required: Question 1.1.1 Prepare a customer profitability analysis for each customer group and comment on their relative profitability. Word limit for later part: 100 words. Note the word count at the end of your answer] (6 marks) Your Answer (expand the space as required)