Colise Services is a repair-service company specializing in small household jobs. Each client pays a fixed monthly
Question:
Colise Services is a repair-service company specializing in small household jobs. Each client pays a fixed monthly service fee based on the number of rooms in the house. Records are kept on the time and material costs used for each repair. The following profitability data apply to five customers:
Customer Revenues Customer Costs
Marveline Burnett $360 $270
J Jackson 240 366
Roger Jones 96 90
Paul Saas 90 132
Becky Stephan 420 264
Required:
- Compute the operating income for each of the five customers.
- What options should Colise Services consider in light of the customer-profitability results?
- What problems might Colise Services encounter in accurately estimating the operating costs of each customer?
Consider revenues from three of Megafy's 10 wholesale customers in 2015:
| Customer | Customer | Customer |
| A | B | C |
Units sold | 20,000 | 15000 | 3000 |
List selling price | $500 | $500 | $500 |
Price discount | $50 | $30 | $100 |
Invoice price | $450 | $470 | $400 |
Revenues | $9,000,000 | $7,050,000 | $1,200,000 |
What conclusions can be drawn from the above data? What steps can the manager of the company take?
Fundamentals of Investing
ISBN: 978-0133075359
12th edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk