Need Help with the following attachment. Please show work and typed. 41) Custome

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Need Help with the following attachment. Please show work and typed.

41) Customer Decision. The following customer segmented annual income statement is for Management Consulting, Inc. Customers Cherry Corp $500,000 400,000 $100,000 Orange, Inc. $500,000 370,000 $130,000 Apple, LLP $250,000 180,000 $ 70,000 65,000 Total Sales revenue Variable costs Contribution margin Direct fixed costs Allocated fixed costs Profit (loss) $1,250,000 $300,000 100 950,000 30,000 40,000 135,000 40 $ 30,000 40 $ 50,000 $(15,000) S 65.000 Management is concerned about the losses associated with the Apple LLP account and would like to drop this customer. Allocated fixed costs are assigned to customers based on sales revenue. If Apple LLP is dropped, total allocated fixed costs are assigned to the remaining customers, and all variable and direct fixed costs for the Apple LLP account will be eliminated. Required. a. Perform differential analysis using the format presented in Figure 7.10 "Customer Differential Analysis for Colony Landscape Maintenance". Assume keeping all customers is Alternative 1, and dropping the Apple LLP account is Alternative 2. b.Which alternative is best? Explain. c. Summarize the result of dropping the Apple LLP account using the format presented in Figure 7.12 "Summary of Differential Analysis for Colony Landscape Maintenance" d. Explain why the loss shown for the Apple LLP account in the segmented income statement might be misleading to management.

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Part-a Alternative-1 Alternative-2 Differential Sales Revenue         1,250,000         1,000,000         250,000 Variable Cost 950000 770000         180,000 Contribution Margin            300,000            230,000           70,000 Direct Fixed Cost 135000 70000           65,000 Allocated Fixed Cost 100000 100000                     -   Profit/(loss)               65,000               60,000              5,000 Part-b Alternative-1 is best as after dropping Apple, Net Income will be reduced by 5000 Part-c Dropping Apple, will reduce net income by 5000 Part-d Because allocated fixed cost which is not pretaining to only one prodcut

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