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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
foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The companys activitybased costing system has four activity cost pools, which are listed below along with their activity measures and activity rates:
Activity Cost PoolActivity MeasureActivity Rate
Supporting direct laborNumber of direct laborhours$ per direct laborhour
Batch processingNumber of batches$ per batch
Order processingNumber of orders$ per order
Customer serviceNumber of customers$ per customer
The company just completed a single order from Interstate Trucking for custom seat cushions. The order was produced in two batches. Each seat cushion required direct laborhours. The selling price was $ per unit, the direct materials cost was $ per unit, and the direct labor cost was $ per unit. This was Interstate Truckings only order during the year.
Required:
Calculate the customer margin on sales to Interstate Trucking for the year.
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