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Wizard Corporation has analyzed their customer and order handling data for the past year and has...

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Finance

Wizard Corporation has analyzed their customer and orderhandling data for the past year and has determined the followingcosts:

Order processing cost per order $7

Additional costs if order must be expedited (rushed) $8.00

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% ofSales.

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

Sales $15,500

Number of orders 160

Percent of orders marked rush 70%

Calls to technical support 80

Required: Calculate the profitability of the Chester Companyaccount.

Answer & Explanation Solved by verified expert
4.3 Ratings (820 Votes)
According to the question The total sales of the company is 15500 The cost of the product 75 of Sales 11625 Let us now calculate other costs 1 Total cost of order    See Answer
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