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 PoolActivity MeasureActivity RateSupporting direct labourNumber of direct labour-hours$7per direct labour-hourBatch processingNumber of batches$46per batchOrder processingNumber of orders$86per orderCustomer serviceNumber of customers$82per customer
The company just completed a single order from SkateCo for 1,250 entry-level skateboards. The order was produced in 27 batches. Each skateboard required 1.6 direct labour-hours. The selling price was $180 per skateboard, the direct materials cost was $68.60 per skateboard, and the direct labour cost was $17.50 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.
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