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  3. delta products has determined the following costs:

Delta Products has determined the following costs: Order processing (per order) $6...

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Accounting

Delta Products has determined the following costs:

Order processing (per order) $6
Additional handling costs if order marked rush (per order) $12
Customer service call (per call) $12
Relationship management costs (per customer per year) $3,530

In addition to these costs, product costs amount to 83 percent of sales. In the prior year, Delta had the following experience with one of its customers, Johnson Brands:

Sales $54,400
Number of orders 260
percent of orders marked rush 70%
Calls to customer service 167

For the coming year, Delta Products has told Johnson Brands that it will be switched to an activity-based pricing system or it will be dropped as a customer. In addition to regular prices, Johnson will be required to pay:

Order processing (per order) $7
Additional handling costs if order marked rush (per order) $14
Customer service calls (per call) $17

Calculate the profitability of the Johnson Brands account if activity is the same as in the prior year. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

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