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Exercise 7-11 (Algo) Second-Stage Allocation and Margin Calculations [LO7-4, L07-5] Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The
Exercise 7-11 (Algo) Second-Stage Allocation and Margin Calculations [LO7-4, L07-5] 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 Activity Measure Supporting direct labor Number of direct labor-hours Batch processing Order processing Customer service Number of batches Number of orders Number of customers Activity Rate $12 per direct labor-hour $ 87 per batch $ 270 per order $ 2,626 per customer The company just completed a single order from Interstate Trucking for 1,600 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $141.70 per unit, the direct materials cost was $111 per unit, and the direct labor cost was $14.80 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:
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