The following information pertains to lumber sales for the Timber Company for 2012.

The company also has a discount policy in place. If customer purchases more than 125,000 boards, a discount of \($0.50\) per board will apply. If a customer purchases in excess of 200,000 boards, a discount of \($1.00\) per board will apply. The average price per board is \($2.50\) and the costs to produce each board are $0.50.

a. Prepare a report showing the customer profitability for each customer.

b. What is the optimal sales mix for the company, considering the demand volumes for each customer?

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Boards Sold Demand Customer-Specific Costs Customer 1 122,000 140,000 $20,000 Customer 2 135,000 140,000 $20,000 Customer 3 205,000 220,000 $39,000 Customer 4 105,000 120,000 $15,000 Customer 5 150,000 175,000 $28,000