Reference no: EM132967663
Question - Wizard Company has analyzed their customer and order handling data for the past year and has determined the following costs:
Order processing cost per order $7
Addition cost if order must be expedited (rushed) $9.00
Customer Technical support calls (per call) $12
Relationship management costs (per customer per year) $1200
In addition to these costs, production costs amount to 75% of sales.
In the prior year, Wizard had the following experience with one of its customers, Chester Company:
Sales $15,000
Number of orders 160
Percent of orders marked rush 70%
Calls to technical support 80
Required - Calculate the profitability of the Chester Company account.
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