Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The company's activity-based...
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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 Measure Activity Cost Pool Supporting direct labor Batch processing Number of direct labor-hours Number of batches Order processing Customer service Number of orders Number of customers Activity Rate $8 per direct labor-hour $85 per batch $ 276 per order $ 2,638 per customer The company just completed a single order from Interstate Trucking for 1,900 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.7 direct labor-hours. The selling price was $142.20 per unit, the direct materials cost was $112 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 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 Measure Activity Cost Pool Supporting direct labor Batch processing Number of direct labor-hours Number of batches Order processing Customer service Number of orders Number of customers Activity Rate $8 per direct labor-hour $85 per batch $ 276 per order $ 2,638 per customer The company just completed a single order from Interstate Trucking for 1,900 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.7 direct labor-hours. The selling price was $142.20 per unit, the direct materials cost was $112 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
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