Instant Service (IS) repairs printers and photocopiers for five multisite companies in a tristate area. IS's costs consist of the cost of technicians and equipment that are directly traceable to the customer site and a pool of office overhead. Until recently, IS estimated customer profitability by allocating the office overhead to each customer based on share of revenues. For 2017, IS reported the following results:

Abby Costa, IS's new controller, notes that office overhead is more than 10% of total costs, so she spends a couple of weeks analyzing the consumption of office overhead resources by customers. She collects the following information:

Required:
1. Compute customer-level operating income using the new information that Costa has gathered.
2. Prepare exhibits for IS similar to Exhibits 14-4 and 14-5. Comment on the results.
3. What options should IS consider, with regard to individual customers, in light of the new data and analysis of office overhead?

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Home Insert Page Layout Formulas Dt Rw View Total Okie WizardGrainger Duran $390,000$300,000 $483,000 $183,000 $318,000 $1,674,000 Avery 2 Revenues 4 Office overhead allocated 47,78936,76059,186 22,423 38,967 205,125 EN Home Insert Page Layout Fornulas Data Review Activity Area Cost Driver Rate $85per service call $80 per Web-based parts order $50 per bill (or reminder) 2 Service call handling Parts ordering 4 Billng and collection Home Insert Page Layout Formulas Data Review View Avery Okie Wizard Grainger Dura 180 270 225 225 180 8 9 Number of service calls 225 360 60 180 31590 45 135 135 90