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1. Compute the customer-level operating income of each of the five retail customers now being examined (1, 2, 3, 4, and 5). Comment on the

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed 1. Compute the customer-level operating income of each of the five retail customers now being examined (1, 2, 3, 4, and 5). Comment on the results. 2. What insights do managers gain by reporting both the list selling price and the actual selling price for each customer? 3. What factors should managers consider in deciding whether to drop one or more of the five customers? i Data Table - - X Activity Order taking Customer visits Deliveries Product handling Expedited deliveries Cost Driver Rate $130 per purchase order $80 per customer visit $3 per delivery mile traveled $0.80 per case sold $360 per expedited delivery Print Done i Data Table - Customer 1 2 3 4 5 Cases sold 1,700 8,850 63,400 32,000 2,200 List selling price $15.10 $15.10 $15.10 $15.10 $15.10 Actual selling price $15.10 $14.76 $13.10 $14.60 $13.65 Number of purchase orders 17 23 41 31 40 Number of customer visits 3 1 8 1 4 Number of deliveries 19 33 71 40 40 Miles traveled per delivery 22 9 10 12 38 Number of expedited deliveries 0 0 0 0 3 Print Done Stable Paper Delivery has decided to analyze the profitability of five new customers. It buys recycled paper at $11 per case and sells to retail customers at a list price of $15.10 per case. Data pertaining to the five customers are: (Click the icon to view the data.) Stable Paper Delivery's five activities and their cost drivers are as follows: (Click the icon to view the activities and cost drivers.) Read the requirements. Requirement 1. Compute the customer-level operating income of each of the five retail customers now being examined (1, 2, 3, 4, and 5). Comment on the results. Begin by calculating each customer's gross margin. Then calculate the operating income for each customer. (Complete all input fields. Enter a "0" for any zero balances. Use parentheses or a minus sign for operating losses.) 1 2 3 4 5 Revenues at list price Price discounts Revenues at actual prices Cost of goods sold Gross margin

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