Question
Required: Calculate the profitability of the Chester Company account. Wizard Corporation has analyzed their customer and order handling data for the past year and has
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| Calculate the profitability of the Chester Company account. |
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Wizard Corporation has analyzed their customer and order handling data for the past year and has determined the following costs:
| Order processing cost per order | $7 |
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| Additional costs if order must be expedited (rushed) | $9.00 |
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| Customer technical support calls (per call) | $12 |
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| Relationship management costs (per customer per year) | $1200 |
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| In addition to these costs, product costs amount to 75% |
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| In the prior year, Wizard had the following experience with one of its customers, Chester Company: | ||
| Sales | $16,000 |
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| Number of orders | 160 |
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| Percent of orders marked rush | .70 |
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| Calls to technical support | 80 |
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