Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
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Wizard Corporation has analyzed their customer and order handling data for the past year and has determined the following costs: |
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Order processing cost per order |
$7 |
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Additional costs if order must be expedited (rushed) |
$10.00 |
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Customer technical support calls (per call) |
$12 |
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Relationship management costs (per customer per year) |
$1200 |
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In addition to these costs, product costs amount to 75% of Sales. |
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In the prior year, Wizard had the following experience with one of its customers, Chester Company: |
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Sales |
$15,500 |
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Number of orders |
160 |
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Percent of orders marked rush |
70% |
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Calls to technical support |
80 |
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Required: |
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Calculate the profitability of the Chester Company account. |
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