|

Above,
both customers show a positive gross profit of $10,322 and $70,669
respectively. When the costs of services are deducted from gross profit to
arrive at profit contribution, the customer in Figure 3 is generating a
loss of $3,602 while the customer in Figure 4 is generating a profit of
$39,442. As can be seen from these illustrations, the costs of services
reduce the gross profit substantially. The ABC tool also identifies which
services the customer is using and the cost of service for each customer. |