Answer:
Creative Canopies (CC)
With gross profits of $10,000, the least profitable is:
B. UCLA
Explanation:
a) Maintenance Costs of Canopies:
Support Activity Driver Cost per Driver Unit
Major refinishes: Hours on jobs $55
Minor touchups: Number of visits $400
Communication: Number of calls $25
b) Customer Data:
University Hours major Visits minor Calls=
USD 100 7 12
USC 90 5 15
UCLA 120 6 9
c) Calculation of the Cost of Canopy Maintenance for each customer:
University Hours Major Minor Major Minor Commun- Total
Visits Calls Refinishes Touchups ication
USD 100 7 12 $5,500 $2,800 $300 $8,600
USC 90 5 15 $4,950 $2,000 $375 $7,325
UCLA 120 6 9 $6,600 $2,400 $225 $9,225
d) Calculation of net income from each customer:
University Gross Profit Maintenance Cost Net Income
USD $10,000 $8,600 $1,600
USC $10,000 $7,325 $2,675
UCLA $10,000 $9,225 $775
