Adelaide Limited is a wholesale business. It supplies products to four department stores operating in the Riverland towns of South Australia. The names of the stores are: Loxton, Renmark, Waikerie and Berri. These four businesses are the customers of Adelaide Limited. Adelaide Limited send catalogues to its customers (retail stores) on a monthly basis. The stores are entitled to return unsold products within a six-month period from the purchase date. The following data were collected from last years (2019) operations:

	customers
	loxton	renmark	waikerie	berri
net sales (sales minus sales return)	$65,000	$30,000	$120,000	$80,000

The direct costs (cost of goods sold) averages 70% of net sales. Adelaide Limited incurred indirect costs of $39,225 in 2019. Alex Stuart, Chief Executive Officer of Adelaide Limited, is having a discussion with Emily Jones, Finance Director. Following is the conversation: Alex: Overall, our business is profitable. I wish to know more about our customer profitability. Emily: We usually calculate the organisational profit. Certainly we can find out customer profitability.

Requirement: 1.Calculate profitability of each of the customers for Adelaide Limited. Allocate indirect costs based on the net sales ($) to the four retail stores (customers).

2.Explain the benefits of knowing the customer profitability for Adelaide Limited?