Ellie Mosk, CEO of X$-$Space Industries, decided to expand the company's product offering beyond the core model

rocket business. After investigation, she decided to set up a separate division to design and manufacture products for

the drone market. Several companies were interested in having X$-$Space develop these drones, and financial results,

to date, have been encouraging. Revenue was $$4$ million, gross margins have been running about $40\%,$ and the

customer sales and support costs were $$1$ million. However, there is a growing concern that some customers require

a disproportionate share of the sales and support resources, and the true profitability of the customers is unknown.

Data were collected to support an analysis of customer profitability:

Required:

Management felt the easiest way to allocate the sales and support costs was based on the total revenue. Using

total revenue as the allocation base, determine the profitability of each of the five customers.

Management felt that because the data revealed some customers require a disproportionate share of sales and

support resources, activity$-$based costing should be used to determine customer profitability. Use ABC to prepare a

customer profitability analysis.

Complete this question by entering your answers in the tabs below.

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Required $2$

Management felt that because the data revealed some customers require a disproportionate share of sales and support

resources, activity$-$based costing should be used to determine customer profitability. Use ABC to prepare a customer

profitability analysis. $($Round your intermediate calculations and final answers to $2$ decimal places. For percentages $.1234=$

$12\mathrm{.}34\%.)$

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