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Tristan Industries, Inc., makes heavy duty shock absorbers designed for off-road vehicles. The companys ABC costing system has four cost pools, which are listed below

Tristan Industries, Inc., makes heavy duty shock absorbers designed for off-road vehicles.

The companys ABC costing system has four cost pools, which are listed below with their activity measures and activity rates:

Activity Cost Pool Activity Measure Activity Rate
Supporting direct labor Number of direct labor-hours $ 10 per direct labor-hour
Batch processing Number of batches $ 96 per batch
Order processing Number of orders $ 271 per order
Customer service Number of customers $ 2,623 per customer

The company just completed a single order from Trail Blazers Company for 2,600 shock absorbers.

The order was produced in three batches. Each shock absorber required 0.7 direct labor-hours.

The selling price was $141.60 per unit, the direct materials cost was $107 per unit, and the direct labor cost was $14.80 per unit.

This was Trail Blazers only order during the year.

Required:

Calculate the customer margin on sales to Trail Blazers for the year.

Part 2.

Assume a company is preparing a budget for its first two months of operations.

During the first and second months it expects cash sales of $36,500 and $40,500, respectively.

It also expects credit sales of $56,500 and $66,500, respectively.

The company expects to collect 30% of its credit sales in the month of the sale, 60% in the following month, and 10% is deemed uncollectible.

What amount of cash collections would appear in the companys cash budget for the second month?

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