Question

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............ $ 8
Additional costs if order must be expedited (rushed)... $ 9
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, Julius Company:
Sales ............... $20,000
Number of orders......... 170
Percent of orders marked rush .... 80%
Calls to technical support....... 90

Required
Calculate the profitability of the Julius Company account.



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  • CreatedSeptember 23, 2013
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