Question

Handy-Man Services is a repair-service company specializing in small household jobs. Each client pays a fixed monthly service fee based on the number of rooms in the house. Records are kept on the time and material costs used for each repair. The following profitability data apply to five customers:

                                 Customer Revenues    Customer Costs

Marveline Burnett              $300                     $225

J Jackson                              200                       305

Roger Jones                           80                          75

Paul Saas                               75                       110

Becky Stephan                    275                       220

Required:

a.   Compute the operating income for each of the five customers.

b.   Which customer do they make the most net income from on a dollar basis?

c.   Which customer do they make the most net income from as a percentage of

      Customer Revenues?

Answer 1