Activity-Based Costing and Customer-Driven Costs Lambo Auto Limited manufactures a limited edition luxury car that it sells through distributors. The company sells the cars to its distributors for $100,000 each and is very willing to accommodate the requirements of its distributors in order to increase volume. Even though the car sells for a high price, the small batch production methods result in only modest profits. In addition to the normal manufacturing and operating costs that result in a margin on each auto sold of about $10,000, the company incurs some additional costs because of its close relationship to its distributors. These include sales and service calls ($2,500 each); engineering changes ($10,000 each); special packaging for overseas shipment ($10,000 each); and order processing costs ($2,500 each). While these costs seem quite high, the company believes that it controls the demands of its distributors to keep the costs low Below is a chart of the additional costs required by each of its distributors: Changes Made 0 10 50 75 Sales/Service Calls Packaging Requests 0 Orders Placed Distributor Cars Sold Atkins Brower Caldwell Driscoll 100 100 100 100 10 20 40 80 4 10 20 Required: Determine the profitability of each customer and recommend action to the company Operating Income Atkins Brower Caldwell Driscoll Total