Gonalong, Inc. has 10 customers that account for all of its $4,520,000 of net income. Its activity-based costing system is able to assign all costs, except for $650,000 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
|
$336,000
|
|
#2
|
634,000
|
|
|
#3
|
(277,000)
|
|
|
#4
|
979,000
|
|
|
#5
|
1,060,000
|
|
|
#6
|
902,000
|
|
|
#7
|
628,000
|
|
|
#8
|
292,000
|
|
|
#9
|
(95,000)
|
|
|
#10
|
711,000
|
|
|
Total
|
$5,170,000
|
|
(a) Using the customer profitability analysis provided in the exercise to calculate the following profits.
(i) Calculate the total profits from the 3 most profitable customers
(ii) Calculate the total profits for the 5 most profitable customers
(iii) Calculate the total profits for the 8 most profitable customers
(iv) Calculate the total profits for the 9 most profitable customer