Wizard Corporation has analyzed their customer and order handling data for the past year and has determined
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Question:
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 |
Additional costs if order must be expedited (rushed) | $9.50 |
Customer technical support calls (per call) | $12 |
Relationship management costs (per customer per year) | $1200 |
In addition to these costs, product costs amount to 75% of Sales. | |
In the prior year, Wizard had the following experience with one of its customers, Chester Company: | |
Sales | $16,000 |
Number of orders | 160 |
Percent of orders marked rush | 70% |
Calls to technical support | 80 |
Required: | |
Calculate the profitability of the Chester Company account. |
Posted Date: