Reference no: EM132506790

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)      $10.00

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                                $15,500

Number of orders                 160

Percent of orders marked rush   70%

Calls to technical support           80

Required:

Question 1: Calculate the profitability of the Chester Company account.