Foam Products, 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 The company just completed a single order from Interstate Trucking for 2,800 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $141.20 per unit, the direct materials cost was $106 per unit, and the direct labor cost was $14.40 per unit. This was Interstate Trucking's only order during the year. Costs: Required: Calculate the customer margin on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis Activity Rate $14 per direct labor-hour $95 per batch $288 per order $ 2,611 per customer Q Search Prev 7 of 10 Next 29
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Foam Products, 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
The company just completed a single order from Interstate Trucking for 2,800 custom seat cushions. The order was produced in five
batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $141.20 per unit, the direct materials cost was $106
per unit, and the direct labor cost was $14.40 per unit. This was Interstate Trucking's only order during the year.
Costs:
Required:
Calculate the customer margin on sales to Interstate Trucking for the year.
Interstate Trucking
Customer Margin-ABC Analysis
Activity Rate
$14 per direct labor-hour
$95 per batch
$288 per order
$ 2,611 per customer
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