Wizard Corporation has analyzed their customer and order handling data for the past year and has determined
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Question:
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%
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
Calculate the profitability of the Chester Company account.
Related Book For
Financial Accounting
ISBN: 978-0324645576
10th edition
Authors: W. Steve Albrecht, James D. Stice, Earl K. Stice
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