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13 Foam Products, Inc., makes foam seat cushions for the automotive and aerospace Industries. The company's activity-based costing system has four activity cost pools, which
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Foam Products, Inc., makes foam seat cushions for the automotive and aerospace Industries. The company's activity-based costing system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Activity Measure Activity Rate Supporting direct labor Number of direct labor-hours 8 per direct labor-hour Batch processing Number of batches $ 93 per batch Order processing Number of orders 27) per order Customer service Number of customers $ 2,606 per customer $ The company just completed a single order from Interstate Trucking for 2,600 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $141.80 per unit, the direct materials cost was $112 per unit, and the direct labor cost was $14.60 per unit. This was Interstate Trucking's only order during the year. Required: Calculate the customer margin on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis Costs Step by Step Solution
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