Customer Profitability Analysis

HyStandard Services, Inc provides residential painting services for three home building companies. Alpine, Blue Ridge, and Pineola, and it uses a job costing system for determining the costs for completing each job. The job cost system does not capture any cost incurred by HyStandard for return touchups and refioshes after the homeowner occupies the home. HyStandard paints each house on a square footage contract price, which includes painting as well as all refinishes and touchups required after the homes are occupied. Each year. the company generates about one-third of its total revenues and gross profits from each of the three builders. The HyStandard owner has observed that the builders, however, require substantially different levels of support following the completion of jobs. The following data have been gathered:

Support activity

Driver

Cost per Driver Unit

Major refinishes Hours on jobs

Tolicnuns

Number or visits

100

Communication Number of calls

Builder Major Refinishes Touchups Communication

Alpine

80

150

360

Blue Ridge

35

110

205

Pineola

42

115

190

Assuming thar each of the three customers produces gross profits of $75,000, calculate the profitability from each builder after taking into account the support activity required for each builder.

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