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XYZ, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The company's activity-based costing system has four activity cost pools, which are listed
XYZ, Incorporated, makes foam seat cushions for the automotive and aerospace industries. 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 Supporting direct labor Batch processing Order processing Customer service Activity Measure Number of direct labor-hours. Number of batches. Number of orders Number of customers Activity Rate $ 12 per direct labor-hour $ 95 per batch $ 280 per order $ 2,632 per customer The company just completed a single order from I Truck for 1,900 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.3 direct labor-hours. The selling price was $141.30 per unit, the direct materials cost was $103 per unit, and the direct labor cost was $14.80 per unit. This was I Truck's only order during the year. Required: Calculate the customer margin on sales to I Truck for the year.
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