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Ellie Mosk, CEO of X$-$Space Industries, decided to expand the company$$s product offering beyond the core model rocket business. After investigation, she decided to set up a separate division to design and manufacture products for the drone market. Several companies were interested in having X$-$Space develop these drones, and financial results, to date, have been encouraging. Revenue was $$4$ million, gross margins have been running about $40\%,$ and the customer sales and support costs were $$1$ million. However, there is a growing concern that some customers require a disproportionate share of the sales and support resources, and the true profitability of the customers is unknown. Data were collected to support an analysis of customer profitability:

ActivityCost DriverTotal CostSales visitsSales visit days$ $481,000$Product modificationsNumber of modifications$265,000$Phone callsNumber of minutes$92,500$E$-$mail or electronic communicationsNumber of communications$167,000$$ $1,005,500$

CustomerRevenueGross ProfitVisit DaysModificationsPhone MinutesElectronic CommunicationsA$ $395,000$$ $145,00015151,080625$B$495,000195,00025151,170875$C$595,000225,00040401,4201,050$D$1,050,000415,00090601,7702,050$E$1,450,000585,000100702,1702,300$Totals$ $3,985,000$$ $1,565,0002702007,6106,900$

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