5. Total sales of ABC Corp. are $ 100 M and net income is $ 11,5M. The manager thinks eliminating the group marginal customers that constitutes the 10% of the total sales, will increase. Distributing the incomes and expenses of the Company between the marginal customers and credible customers based on income statement, indicate whether the company should eliminate marginal customers or not.

Percentage of sales total fixed variable

Cost of sales (%) 70 - 70 Overhead cost (%) 15 8 7

Collection exp.(%) 1 - 1

Other exp. (%) 2.5 2 0.5