Cortez Corporation has analyzed its customer and order handling data for the pas
ID: 2376128 • Letter: C
Question
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
Calculate the profitability of the Green Company account.
Answer
A.
$1,226
B.
Some other answer
C.
$20,226
D.
$226
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
Explanation / Answer
C