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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

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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