Question
Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The companys activity-based costing system has four activity cost pools, which are
Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The companys activity-based 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 2,900 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $142.20 per unit, the direct materials cost was $107 per unit, and the direct labor cost was $13.90 per unit. This was Interstate Truckings only order during the year.
Required:
Prepare a report showing the customer margin on sales to Interstate Trucking for the year.
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 Supporting direct labor Batch processing Order processing Customer service Activity Measure Activity Rate Number of direct labor-hours Number of batches Number of orders Number of customers $ 10 per direct labor-hour $ 96 per batch $ 279 per order S 2,621 per customer The company just completed a single order from Interstate Trucking for 2,900 custom seat cushions The order was produced in four batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $142.20 per unit, the direct materials cost was $107 per unit, and the direct labor cost was $13.90 per unit. This was Interstate Trucking's only order during the year Required Prepare a report showing the customer margin on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis Costs Customer marginStep by Step Solution
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