Triumph Corporation has analyzed its customer and order handling data for the past year and has determined the following costs:
Order processing cost per order............ $8
Additional costs if order must be expedited (rushed)... $9
Customer technical support calls (per call)....... $13
Relationship management costs (per customer per year). $1,800
In addition to these costs, product costs amount to 80 percent of sales. In the prior year, Triumph had the following experience with one of its customers, Julius Company:
Sales ...............$20,000
Number of orders.........$170
Percent of orders marked rush ....80%
Calls to technical support.......$90
Required:
Calculate the profitability of the Julius Company account.