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Cortez Corporation has analyzed its customer and order handling data for the past year and has determined the following costs:

Order processing cost per order $6
Additional costs if order must be expedited (Rushed) $9
Customer technical support calls (Per call) $7
Relationship management costs (Per customer per year) $1,900

In addition to these costs, product costs amount to 80 percent of sales. In the prior year, Cortez had the following experience with one of its customers, Green Company:

Sales $26,000
Number of orders 170
Percent of orders marked rush 80
Calls to technical support 90

find out the profitability of the Green Company account.

A. $1,226

B. Some other answer

C. $20,226

D. $226

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M943085

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