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Customer Profitability Analysis Gonalong, Inc. has 10 customers that account for all of its $4,520,000 of net income. Its activity-based costing system is able to
Customer Profitability Analysis Gonalong, Inc. has 10 customers that account for all of its $4,520,000 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 | $336,000 |
#2 | 634,000 | |
#3 | (277,000) | |
#4 | 979,000 | |
#5 | 1,060,000 | |
#6 | 902,000 | |
#7 | 628,000 | |
#8 | 292,000 | |
#9 | (95,000) | |
#10 | 711,000 | |
Total | $5,170,000 |
(iii) Calculate the total profits for the 8 most profitable customers
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