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Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The company's 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 ordere Number of customers Required: Calculate the customer margin on sales to Interstate Trucking for the year. Costs The company just completed a single order from Interstate Trucking for 1,700 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $142.40 per unit, the direct materials cost was $105 per unit, and the direct labor cost was $14.80 per unit. This was Interstate Trucking's only order during the year. Activity Rate $8 per direct labor-hour 97 per batch 272 per order Interstate Trucking Customer Margin-ABC Analysis $ $ $ 2,629 per customer

Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The company's 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 ordere Number of customers Required: Calculate the customer margin on sales to Interstate Trucking for the year. Costs The company just completed a single order from Interstate Trucking for 1,700 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $142.40 per unit, the direct materials cost was $105 per unit, and the direct labor cost was $14.80 per unit. This was Interstate Trucking's only order during the year. Activity Rate $8 per direct labor-hour 97 per batch 272 per order Interstate Trucking Customer Margin-ABC Analysis $ $ $ 2,629 per customer

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Foam Products, Inc., 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 Required: Calculate the customer margin on sales to Interstate Trucking for the year. Costs: The company just completed a single order from Interstate Trucking for 1,700 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $142.40 per unit, the direct materials cost was $105 per unit, and the direct labor cost was $14.80 per unit. This was Interstate Trucking's only order during the year. Activity Rate 8 per direct labor-hour 97 per batch 272 per order Interstate Trucking Customer Margin-ABC Analysis $ $ $ $ 2,629 per customer
Transcribed Image Text:Foam Products, Inc., 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 Required: Calculate the customer margin on sales to Interstate Trucking for the year. Costs: The company just completed a single order from Interstate Trucking for 1,700 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $142.40 per unit, the direct materials cost was $105 per unit, and the direct labor cost was $14.80 per unit. This was Interstate Trucking's only order during the year. Activity Rate 8 per direct labor-hour 97 per batch 272 per order Interstate Trucking Customer Margin-ABC Analysis $ $ $ $ 2,629 per customer
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