Colise Services is a repair-service company specializing in small household jobs. Each client pays a fixed monthly service fee based on the number of rooms in the house. Records are kept on the time and material costs used for each repair. The following profitability data apply to five customers:

Customer Revenues Customer Costs

Marveline Burnett $360 $270

J Jackson 240 366

Roger Jones 96 90

Paul Saas 90 132

Becky Stephan 420 264

Required:

1. Compute the operating income for each of the five customers.
2. What options should Colise Services consider in light of the customer-profitability results?
3. What problems might Colise Services encounter in accurately estimating the operating costs of each customer?

Consider revenues from three of Megafy's 10 wholesale customers in 2015:

	Customer	Customer	Customer
	A	B	C
Units sold	20,000	15000	3000
List selling price	$500	$500	$500
Price discount	$50	$30	$100
Invoice price	$450	$470	$400
Revenues	$9,000,000	$7,050,000	$1,200,000

What conclusions can be drawn from the above data? What steps can the manager of the company take?