Customer Profitability Analysis

Gonalong, Inc. has 10 customers that account for all of its $4,430,000 of net income. Its activity-based costing system is able to assign all costs, except for $650,000 of general administrative costs, to key activities incurred in connection with serving its customers. A customer profitability analysis based on activity costing produced the following customer profits and losses:

Customer #1 $326,000 #2 624,000 #3 (247,000) #4 939,000 #5 1,020,000 #6 852,000 #7 608,000 #8 352,000 #9 (95,000) #10 701,000 Total $5,080,000

Using the customer profitability analysis provided in the exercise to calculate the following profits.

(i) Calculate the total profits from the 3 most profitable customers

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(ii) Calculate the total profits for the 5 most profitable customers

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(iii) Calculate the total profits for the 8 most profitable customers

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(iv) Calculate the total profits for the 9 most profitable customers

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