Lightwave Manufacturing Assembly, Inc., provides outsourced manufacturing assembly for electronic products companies. It currently has two major customers, Bell and Toshi, for which Lightwave assembles and delivers products on a just-in-time basis. Lightwave incurs annual warehousing and delivery costs solely to serve its customers. Warehousing costs are found to be proportional to the number of orders. Half of annual general and administrative costs are related to processing and managing customer orders; the remainder is not traced to customers.

Customearnd Administrative Resources Total Bell Toshi PATINULCM LUTON ldO MOLG ENS ecmaet sain. seiner nyaccearesnaaceomceer aeersceeetrei ano:ee e 5,000 3,000 2,000 Average cost of goods Sold per OFdeP.........cccceeecececssseeeeeststeeeeentnes $4,200 $1,800

(UCI SCS MTR EIA olas Rt eine eee nome eran eae ecm e ee es 60% 60%

AVETAGCIOCIIVETICS DET ONQSN n.ccccecacsve.coecseratsotuncn:-sentuenusreabelpeeaecese 5 10 NV Ae OUSIMORCOStS Delay Callccaereutanc aiasnrredssarcecretemphaca atnnenenmrestsees $1,000,000 DETIVEIVECOSISIDEIAVCa linttarnancea caseamisnsteunssa satneesn inastoe erccilesniaa c an 6,000,000 GeneraliacdimimismatlveCOSIS va. c5..re tue scetes can ct ccquaseapoicunetensigncargaenn s 2,400,000 Required

a. Calculate Lightwave’s profitability for each customer and for the entire company.

b. How profitable are the two sets of customers