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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,
Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The company's activitybased costing system has four activity cost pools, which are listed below along with their activity measures and activity rates:
tableActivity Cost Pool,Activity Measure,Activity RateSupporting direct labor,Number of direct laborhours,$ per direct laborhourBatch processing,Number of batches,$ per batchOrder processing,Number of orders,$ per orderCustomer service,Number of customers,$ per customer
The company just completed a single order from Interstate Trucking for custom seat cushions. The order was produced in three batches. Each seat cushion required direct laborhour. The selling price was $ per unit, the direct materials cost was $ per unit, and the direct labor cost was $ per unit. This was Interstate Trucking's only order during the year.
Required:
Calculate the customer margin for Interstate Trucking.
tableInterstate TruckingCustomer MarginABC AnalysisSales$Costs:Direct materials,Direct labor,Supporting direct labor,Batch processingOrder processingCustomer service overheadCustomer margin,,$
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