$\backslash$table$[[$Activity Cost Pool,Activity Measure,Activity Rate$],[$Animation concept,Number of proposals,$$6,700$ per proposal$],[$Animation production,Minutes of completed animation,$$8,200$ per minute$],[$Contract administration,Number of contracts,$$7,000$ per contract$]]$

These activity rates include all of the company's costs, except for its organization$-$sustaining costs and idle capacity costs. There are no direct labor or direct materials costs.

Preliminary analysis using these activity rates indicates the local commercial segment of the market may be unprofitable. Producers of local commercials usually ask three or four companies like Pixel Studio to bid, which results in an unusually low ratio of accepted contracts to bids. Furthermore, the animation sequences are shorter for local commercials than for other work. Because animation work is billed at fairly standard rates according to the running time of the completed animation, this means the revenues from these short projects tend to be below average. Activity data concerning the local commercial market appear below:

$\backslash$table$[[$Activity Measure,$\backslash$table$[[$Local$],[$Commercials$]]],[$Number of proposals,$14],[$Minutes of completed animation,$11],[$Number of contracts,$11]]$

The total sales from the $11$ contracts for local commercials was $$160,000.$

Required:

Calculate the cost of serving the local commercial market.

Calculate the margin earned serving the local commercial market. $($Remember$,$ this company has no direct materials or direct labor costs.$)$

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Calculate the cost of serving the local commercial market.

Cost of serving the local commercial market