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Delta Products has determined the following costs:
Order processing (per order)............... $6.00Additional handling costs if order marked rush (per order).... $10.00Customer service calls (per call)................ $12.00Relationship management costs (per customer per year)...... $3,000In addition to these costs, product costs amount to 85 percent of sales. In the prior year, Delta had the following experience with one of its customers, Johnson Brands:Sales .............$52,000Number of orders......... 250Percent of orders marked rush ... 70%Calls to customer service...... 160
Required:
Calculate the profit ability of the Johnson Brands account.
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