申論題

Problem 5 [20%]
 Whitewater Corporation manufactures kayak components. The company has gathered the following information about two of its customers: Campa Equipment and Edith Refrigeration. Campa Equipment Edith Refrigeration.
   In addition to the above cost items, cost-driver data used by the firn and traceable to Campa and Edith are:
  Required:

(2) Based on (1), Whitewater is considering to drop the customer with the lower operating income. Upon further investigation, it is determined that 10% of the selling costs and 20% of the administrative costs would not be avoidable if Whitewater were to drop the least profitable customer. Should Whitewater drop the Ieast profitable customer? Show your calculations. (10 points)