Homework answers / question archive / 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)   $8

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)   $8

Finance

Share With

---

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)

  $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% of Sales.

 

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  

 

Required:

 Calculate the profitability of the Chester Company account.