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Problem:

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) $8.50 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 $15,000 Number of orders 160 Percent of orders marked rush .70 Calls to technical support 80

Required:

Question: Calculate the profitability of the Chester Company account

Note: Explain all calculation and formulas.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164969

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