Question
Theatre Seating, Inc., makes high-quality adjustable seats for theaters. The company's activity based costing system has four activity cost pools, which are listed below along
Theatre Seating, Inc., makes high-quality adjustable seats for theaters. The company's activity based costing 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 labor | Number of direct labor-hours | $ 12 | per direct labor-hour | |
Batch processing | Number of batches | $ 91 | per batch | |
Order processing | Number of orders | $ 271 | per order | |
Customer service | Number of customers | $ 2,631 | per customer | |
The company just completed a single order from CineMax Entertainment Corporation for 2,100 custom seats. The order was produced in five batches. Each seat required 0.8 direct labor-hours. The selling price was $142.20 per seat, the direct materials cost was $101 per seat, and the direct labor cost was $14.10 per seat. This was the only order from CineMax Entertainment for the year. |
Required: |
Prepare a report showing the customer margin on sales to CineMax Entertainment for the year. |
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