Stable Paper Delivery has decided to analyze the profitability of five new customers. It buys recycled paper at $12 per case and sells to retail customers at a list price of $15.00 per case. Data pertaining to the five customers? are:

	Customer
	1	2	3	4	5
Cases sold	2,100	8,850	63,100	34,100	2,800
List selling price	$15.00	$15.00	$15.00	$15.00	$15.00
Actual selling price	$15.00	$14.66	13.10	$14.47	$13.51
Number of purchase orders	14	28	34	26	38
Number of customer visits	1	2	5	4	3
Number of deliveries	16	38	64	35	38
Miles traveled per delivery	22	6	9	9	43
Number of expedited deliveries	0	0	0	0	3

Stable Paper? Delivery's five activities and their cost drivers? are:

Activity	Cost Driver Rate
Order taking	$190 per purchase order
Customer visits	$90 per customer visit
Deliveries	$1 per delivery mile traveled
Product handling	$0.80 per case sold
Expedited deliveries	$380 per expedited delivery

Requirement 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.

Begin by calculating each? customer's gross margin. Then calculate the operating income for each customer.? (Complete all answer boxes. Enter a? "0" for any zero balances. Use parentheses or a minus sign for operating? losses.)

1

2

3

4

5

Revenues at list price

Price discounts

Revenues at actual prices

Cost of goods sold

Gross margin