Customer profitability analysis. Squeaky Clean, a commercial laundry service, has two clients, Super 6 Motel and Seaside
Question:
Customer profitability analysis. Squeaky Clean, a commercial laundry service, has two clients, Super 6 Motel and Seaside Inn. The following is information about Squeakys revenues and costs (in thousands) by customer for the previous year.
|
| Super 6 Motel | Seaside Inn | Total |
| Revenues (fees charged) | $230 | $350 | $580 |
| Operating Costs Cost of Services (variable).. | $212 | $305 | $517 |
| Salaries, Rent, and General Administration (fixed). | 20 | 35 | 55 |
| Total Operating Costs. | $232 | $340 | $572 |
| Operating Profits.. | $2 | $10 | $8 |
The analysis apparently shows that Super 6 Motel is not profitable for Squeaky. Use differential analysis to decide whether Squeaky should discontinue the Super 6 Motel account.
Customer profitability analysis. Squeaky Clean, a commercial laundry service, has two clients, Super 6 Motel and Seaside Inn. The following is information about Squeakys revenues and costs (in thousands) by customer for the previous year.
|
| Super 6 Motel | Seaside Inn | Total |
| Revenues (fees charged) | $230 | $350 | $580 |
| Operating Costs Cost of Services (variable).. | $212 | $305 | $517 |
| Salaries, Rent, and General Administration (fixed). | 20 | 35 | 55 |
| Total Operating Costs. | $232 | $340 | $572 |
| Operating Profits.. | $2 | $10 | $8 |
The analysis apparently shows that Super 6 Motel is not profitable for Squeaky. Use differential analysis to decide whether Squeaky should discontinue the Super 6 Motel account.
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