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Leahy, Inc. has 10 customers that account for all of its $1,472,000 of net income. Its activity-based costing system is able to assign all costs,
Leahy, Inc. has 10 customers that account for all of its $1,472,000 of net income. Its activity-based costing system is able to assign all costs, except for $200,000 of general administrative costs, to key activities incurred in connection with serving its customers. A customer profitability analysis based on activity costing produced the following customer profits and losses:
Customer | #1 | $ 350,000 |
#2 | 262,000 | |
#3 | (75,000) | |
#4 | 240,000 | |
#5 | 50,000 | |
#6 | 375,000 | |
#7 | (100,000) | |
#8 | 325,000 | |
#9 | 225,000 | |
#10 | (180,000) | |
Total | $ 1,472,000 |
Prepare a customer profitability profile graph in Excel like the one in Exhibit 19.3. & please explain and show how to make the graph.
Exhibit 19.3 Customer Profitability Profile Graph Cumulative Total Profits $7.5 million $5 million Current Total Customer Profits 0 350 200 Customers from Most Profitable to Least Profitable Exhibit 19.3 Customer Profitability Profile Graph Cumulative Total Profits $7.5 million $5 million Current Total Customer Profits 0 350 200 Customers from Most Profitable to Least ProfitableStep by Step Solution
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