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

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)

$9.00 Customer technical support calls (per call)

$12 Relationship management costs (per customer per year)

$1200 In addition to these costs, product costs amount to75% of Sales.

In the prior year, Wizard had the following experience with one of its customers, Chester Company:

Sales

$16,000 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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