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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
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 13 per direct labor-hour Number of batches 88 per batch 284 per order $ 2,638 per customer Number of orders Number of customers The company just completed a single order from Interstate Trucking for 2,800 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.7 direct labor-hours. The selling price was $141.70 per unit, the direct materials cost was $102 per unit, and the direct labor cost was $14.60 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 Sales Costs: 0 Customer margin 0
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