Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hojoco Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning

Hojoco Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below:

Activity Cost Pool

Activity Measure

Activity Rate

Supporting assembly

Direct labor-hours (DLHs)

$5.20

per DLH

Processing batches

Number of batches

$107.55

per batch

Processing orders

Number of orders

$88.75

per order

Serving customers

Number of customers

$1,793.00

per customer

The cost of serving customers, $1,793.00 per customer, is the cost of serving a customer for one year. Rolf Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below:

Number of units sold to Rolf

900

units

Number of batches

8

batches

Number of orders

2

orders

Direct labor-hour requirement

0.25

DLHs per unit

Selling price

$16.30

per unit

Direct materials cost

$6.60

per unit

Direct labor cost

$5.00

per unit

Required:

How much is the customer margin on sales to Rolf Corporation for the year?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions