PROBLEM $3-$ Customer Profitability Analysis

Fast Delivery buys blank video tape at $$40$ per case and sells to retail customers at a list price

of $$52$ per case. Fast Delivery's five activities and their cost drivers are as follows:

Fast delivery has decided to analyze the profitability of its five new customers. Data pertaining

to the five customers are as follows:

Required:

Compute the customer$-$level operating income of each of the five retail customers now

being examined $,$ and $5).$ Comment on the results.

What insights do managers gain by reporting both the list selling price and the actual

selling price for each customer?

What factors should managers consider in deciding whether to drop one or more of the

five customers?