Recyclable Paper Delivery has decided to analyze the profitability of five new customers. It buys recycled paper at $17 per case and sells to retail customers at a list price of $23 per case. Data pertaining to the five customers are as follows: (Click the icon to view the data.) Customer 1 2 3 4 5 2,000 8,850 46,500 32,300 2,250 $ 23$ 23$ 23/$ 23$ 23 $ 23 $ 22.66 $ 20.80 $ 22.51 $ 21.47 14 26 40 13 34 Cases sold List selling price Actual selling price Number of purchase orders Number of customer visits Number of deliveries Miles traveled per delivery Number of expedited deliveries 1 3 15 1 11 16 36 70 22 34 19 10 13 11 36 0 0 0 0 1 Recyclable Paper Delivery's five activities and their cost drivers are: (Click the icon to view the activities and cost drivers.) Activity Order taking Customer visits Deliveries Product handling Expedited deliveries Cost Driver Rate $190 per purchase order $70 per customer visit $3 per delivery mile traveled $0.60 per case sold $380 per expedited delivery Requirements 1. Compute the customer-level operating income of each of the five retail customers now being examined (1, 2, 3, 4, and 5). Comment on the results. 2. What insights do managers gain by reporting both the list selling price and the actual selling price for each customer? 3. What factors should managers consider in deciding whether to drop one or more of the five customers