Wizard Corporation has analyzed their customer and order handling data for the past year and...
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Finance
| 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. | |||
Your Answer:
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