The Triumph Corporation has analyzed its customer and order handling data for the past year and has determined the following costs:
Order processing cost per order .................................................$ 9
Additional costs if order must be expedited (rushed) .....................$ 11
Customer technical support calls (per call)................................. $ 13
Relationship management costs (per customer per year) ...............$1,800
In addition to these costs, product costs amount to 80 percent of sales. In the prior year, Triumph
had the following experience with one of its customers, the Julius Company:
Sales .......................................................$22,000
Number of orders .............................................170
Percent of orders marked rush.................................80%
Calls to technical support .......................................90
Required
Calculate the profitability of the Julius Company account