Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The company s activity - based costing system has four activity cost

Foam Products, Incorporated, 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:
Activity Cost Pool Activity Measure Activity Rate
Supporting direct labor Number of direct labor-hours $ 10 per direct labor-hour
Batch processing Number of batches $ 91 per batch
Order processing Number of orders $ 277 per order
Customer service Number of customers $ 2,632 per customer
The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.7 direct labor-hour. The selling price was $141.30 per unit, the direct materials cost was $102 per unit, and the direct labor cost was $14.60 per unit. This was Interstate Truckings only order during the year.
Required:Calculate the customer margin for Interstate Trucking.

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

Step: 3

blur-text-image

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

Horngrens Cost Accounting A Managerial Emphasis

Authors: Srikant M. Datar, Madhav V. Rajan

16th edition

134475585, 978-0134475998, 134475992, 978-0134475585

More Books

Students also viewed these Accounting questions

Question

What is management growth? What are its factors

Answered: 1 week ago