Problem

Customer-Profitability Profile: Continuation of Preceding ProblemRefer to the information...

Customer-Profitability Profile: Continuation of Preceding Problem

Refer to the information given in the preceding problem for Fresno Fiber Optics and two of its customers. Trace Telecom and Caltex Computer. Additional information for six of Fresno's other customers for the most recent year follows:

Customer

Operating Income

Golden Gate Service Associates

$71 ,000

Tell- install. Inc

(18,000)

Grayoon Computer Company .

60,000

Mid-State Computing Company

42,000

Network-All, Inc.

93,000

The California Group

6,000

Required:

1. Prepare Fresno Fiber Optics' customer profitability profile for the most recent year.

2. As Fresno Fiber Optics' director of cost management, write a memo to the company's vice president of marketing that will accompany the customer profitability profile. Include a brief explanation of The Methodology used and comment on the results.

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