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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
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 Cost Pool Activity Measure Activity Rate Supporting direct labor Number of direct labor-hours $ 13 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 $ 2,684 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 0.3 direct labor-hours. The selling price was $142.00 per unit the direct materials cost was $102 per unit, and the direct labor cost was $14.90 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: Direct materials Direct labor Supporting direct labor Batch processing Order processing Customer service overhead 0 Customer margin s 0
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