Question
Roll Board Inc. manufactures several models of high-quality skateboards. The companys ABC system has four activity cost pools, which are listed below along with their
Roll Board Inc. manufactures several models of high-quality skateboards. The companys ABC 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 labour | Number of direct labour-hours | $ | 17 | per direct labour-hour |
Batch processing | Number of batches | $ | 95 | per batch |
Order processing | Number of orders | $ | 175 | per order |
Customer service | Number of customers | $ | 1,240 | per customer |
The company just completed a single order from SkateCo for 3,950 entry-level skateboards. The order was produced in 33 batches. Each skateboard required 0.6 direct labour-hours. The selling price was $125 per skateboard, the direct materials cost was $76.90 per skateboard, and the direct labour cost was $18.90 per skateboard. This was the only order from SkateCo for the year.
Required:
Prepare a report showing the customer margin on sales to SkateCo for the year.
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