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    Computing net profit for customer

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    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) $9.50

    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

    Compute net profit for customer.

    © BrainMass Inc. brainmass.com October 10, 2019, 7:45 am ad1c9bdddf
    https://brainmass.com/business/arbitrage-pricing-theory/computing-net-profit-customer-594059

    Solution Preview

    Order processing cost per order $7
    Additional costs if order must be expedited (rushed) $9.50
    Customer technical support calls (per call) $12
    Relationship management costs (per customer per year) $1,200
    Product cost 75%
    ...

    Solution Summary

    This solution provides computation for net profit per customer with the given costs.

    $2.19