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 Activity Sales visits Product modifications Phone calls E-mail/electronic communications Cost Driver Sales visit days Number of modifications Number of minutes Number of communications Total Cost $ 490,000 274,000 93,400 176,000 $1,033,400 Visit Days Customer 875 Revenue $ 404,000 504,000 604,000 1. 140.000 1.500.000 $4,192,000 Gross Profit $ 154,000 204,000 234.000 424.000 594.000 $1,610,000 Phone Electronie Modifications Minutes Comunications 1,170 625 1,260 1.510 1.140 1,860 2,140 2.260 2,390 200 3,060 7.170 270