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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
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