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 Activity Rate Number of direct labor-hours $ 9 per direct labor-hour Number of batches 95 per batch Number of orders $ 277 per order Number of customers $ 2,607 per customer The company just completed a single order from Interstate Trucking for 2,000 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $142.40 per unit, the direct materials cost was $102 per unit, and the direct labor cost was $13.80 per unit. This was Interstate Trucking's only order during the year. Required: Calculate the customer margin on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis Costs: 0 Customer margin $ 0
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 Activity Rate Number of direct labor-hours $ 9 per direct labor-hour Number of batches 95 per batch Number of orders $ 277 per order Number of customers $ 2,607 per customer The company just completed a single order from Interstate Trucking for 2,000 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $142.40 per unit, the direct materials cost was $102 per unit, and the direct labor cost was $13.80 per unit. This was Interstate Trucking's only order during the year. Required: Calculate the customer margin on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis Costs: 0 Customer margin $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Activity Rate
Number of direct labor-hours
$
9 per direct labor-hour
Number of batches
95 per batch
Number of orders
$
277 per order
Number of customers
$ 2,607 per customer
The company just completed a single order from Interstate Trucking for 2,000 custom seat cushions. The order was produced in five
batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $142.40 per unit, the direct materials cost was $102
per unit, and the direct labor cost was $13.80 per unit. This was Interstate Trucking's only order during the year.
Required:
Calculate the customer margin on sales to Interstate Trucking for the year.
Interstate Trucking
Customer Margin-ABC Analysis
Costs:
0
Customer margin
$
0
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