Question: E 1 8 - 2 6 . Customer Profitability Analysis Leahy Inc. has 1 0 customers that account for all of its $ 1 ,

E18-26. Customer Profitability Analysis
Leahy Inc. has 10 customers that account for all of its $1,472,000 of net income. Its activity-based
costing system is able to assign all costs, except for $200,000 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:
REQUIRED
Prepare a customer profitability profile like the one in Exhibit 18.3.
E18-27. Customer Profitability Analysis
Refer to the previous exercise E18-26 for Leahy Inc.
REQUIRED
a. If Leahy were to notify customers 3,7, and 10 that it will no longer be able to provide them
services in the future, will that increase company profits by $355,000? Why or why not?
b., What is the primary benefit of preparing a customer profitability analysis?
E18-26. Customer Profitability Analysis Leahy Inc. has 10 customers that account

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