Spring Distribution has decided to analyze the profitability of five new customers. It buys bottled water at $12 per case and sells to retail customers at a list price of $14.40 per case. Data pertaining to the five customers are:

REQUIRED
1. Compute the customer-level operating income of each of the five retail customers now being examined (P, Q, R, S, and T). Comment on the results.
2. What insights are gained by reporting both the list selling price and the actual selling price for each customer?
3. What factors should Spring Distribution consider in deciding whether to drop one or more of the five customers?

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Customer 8,750 Cases sold List selling price Actual selling price Number of purchase orders Number of customer visits Number of deliveries Miles travelled per delivery Number of expedited deliveries 3,900 $14.40 $14.40 S14.40 $14.40 S14.40 $14.40 $14.16 $13.20$13.92 S12.96 30 2,080 60,800 31,800 15 25 30 25 10 30 40 20 4 40 Activity Order taking Gustomer visits Deliveries Cost Driver Rate S100 per purchase order 80 per customer visit $2 per delivery mile travelled 0.50 per case sold S300 per expedited delivery Product handling Expedited deliveries