Question
Roll Board Inc. manufactures several models of high-quality skateboards. The company's 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 company's ABC system has four activity cost pools, which are listed below along with their activity measures and activity rates:
Activity Cost PoolActivity MeasureActivity RateSupporting direct labourNumber of direct labour-hours$6per direct labour-hourBatch processingNumber of batches$45per batchOrder processingNumber of orders$85per orderCustomer serviceNumber of customers$72per customer
The company just completed a single order from SkateCo for 1,200 entry-level skateboards. The order was produced in 12 batches. Each skateboard required 1.5 direct labour-hours. The selling price was $175 per skateboard, the direct materials cost was $68.50 per skateboard, and the direct labour cost was $20 per direct labour-hour. 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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started