Question
Bale Inc. makes high-quality adjustable seats for theaters. The companys activity based costing system has four activity cost pools, which are listed below along with
Bale Inc. makes high-quality adjustable seats for theaters. The companys 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 $12 per direct labor-hour Batch processing . . . . . . . . . . . Number of batches $96 per batch Order processing . . . . . . . . . . . Number of orders $284 per order Customer service . . . . . . . . . . . Number of customers $2,620 per customer The company just completed a single order from Austin Entertainment Corporation for 2,400 custom seats. The order was produced in four batches. Each seat required 0.8 direct labor hours. The selling price was $137.95 per seat, the direct materials cost was $112.00 per seat, and the direct labor cost was $14.40 per seat. This was the only order from Austin Entertainment for the year.
Required: Prepare a report for Bale Inc. showing the customer margin on sales to Austin Entertainment for the year.
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