Customer profitability, customer cost hierarchy. Ramish Electronics has two retail cus¬

tomers and two wholesale customers. Pertinent information relating to each customer for 2008 follows (all amounts are in thousands of dollars):

WHOLESALE RETAIL North America Wholesaler South America Wholesaler Big Sam Stereo World Market Cost of goods sold Delivery costs:

$325,000 $490,000 $112,000 $ 92,000 Regular 300 450 150 80 Expedited 120 200 10 5 Order processing 800 1,000 200 130 Product handling 5,000 6,000 800 900 Sales visits 480 550 240 165 Revenues at list prices 440,000 660,000 143,000 110,000 Discounts from list prices 30,000 50,000 7,000 0 662 Required Ramish’s distribution-channel costs are $30 million for wholesale customers and $10 million for retail customers. Its corporate-sustaining costs are $60 million.

1. Calculate customer-level operating income using the format in Exhibit 16-5.

2. Prepare a customer cost hierarchy report using the format in Exhibit 16-6.