Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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,

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:
\table[[Activity Cost Pool,Activity Measure,Activity Rate,],[Supporting direct labor,Number of direct labor-hours,$,9 per direct labor-hour],[Batch processing,Number of batches,$,85 per batch],[Order processing,Number of orders,$,284 per order],[Customer service,Number of customers,$2,622 per customer,]]
The company just completed a single order from Interstate Trucking for 2,400 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $142.10 per unit, the direct materials cost was $102 per unit, and the direct labor cost was $13.80 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.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Core Concepts Of Accounting Information Systems

Authors: Nancy A. Bagranoff, Mark G. Simkin, Carolyn Strand Norman

11th Edition

9780470507025, 0470507020

More Books

Students also viewed these Accounting questions

Question

How is the WRR calculated utilizing the top-down approach?

Answered: 1 week ago

Question

What is management growth? What are its factors

Answered: 1 week ago