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Exercise 7 - 1 1 ( Static ) Second - Stage Allocation and Margin Calculations [ L 0 7 - 4 , LO 7 -
Exercise Static SecondStage Allocation and Margin Calculations L LO
Foam Products, Incorporated, 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
Supporting direct labor
Batch processing
Order processing
Customer service
Activity Measure
Number of direct laborhours
Number of batches
Number of orders
Number of customers
Activity Rate
The company just completed a single order from Interstate Trucking for custom seat cushions. The order was produced in
two batches. Each seat cushion required direct laborhours. The selling price was $ per unit, the direct materials cost
was $ per unit, and the direct labor cost was $ 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. Round your answers to decimal places. Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The companys activitybased costing system has four activity cost pools, which are listed below along with their activity measures and activity rates: Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The company's activitybased costing system has four activity cost pools, which are listed below along with their activity measures and activity rates: The company just completed a single order from Interstate Trucking for custom seat cushions. The order was produced in three batches. Each seat cushion required direct laborhours. The selling price was $ per unit, the direct materials cost was $ per unit, and the direct labor cost was $ 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.
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