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Ariana produces custom widgets for its customers. The company uses an activity-based costing system for its overhead costs. One particular customer, Lipa, requested 40 jobs
Ariana produces custom widgets for its customers. The company uses an activity-based costing system for its overhead costs. One particular customer, Lipa, requested 40 jobs during the year for a total of 135 units, requiring a total of 198 machine hours. Each unit requires $0.68 in direct materials and $1.78 in direct labor. The customer was charged $3856 for these jobs and total overhead applied to Lipa under ABC was $2027. Using ABC, compute the customer margin for Lipa. Round ONLY your final answer to the nearest whole dollar amount. Do not round intermediate calculations. Hint: Remember the customer margin is the same as the gross profit for the customer so revisit how to compute gross profit/margin then consider all the costs that are included as product costs
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