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Accounting

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) $10.00

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%

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:

Question: Calculate the profitability of the Chester Company account.

Note: Please show how to work it out.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167019

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