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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 Activity Activit Measure y Rate Cost Pool Supporting direct labor Batch processing Number of batches Order Number of orders processing Number of direct Customer service labor- hours Number of customers $9 $ 87 per direct labor- hour per batch $ 285 per order $ 2,606 per customer The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $141.70 per unit, the direct materials cost was $109 per unit, and the direct labor cost was $13.90 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.

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 Activity Activit Measure y Rate Cost Pool Supporting direct labor Batch processing Number of batches Order Number of orders processing Number of direct Customer service labor- hours Number of customers $9 $ 87 per direct labor- hour per batch $ 285 per order $ 2,606 per customer The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $141.70 per unit, the direct materials cost was $109 per unit, and the direct labor cost was $13.90 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 Activity Activit Measure y Rate Cost Pool Supporting direct labor Order processing Number of direct Number Batch of processing batches Number of orders Customer service labor- hours Number of customers $9 $ 87 per direct labor- hour per batch $ 285 per order $ 2,606 per customer The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $141.70 per unit, the direct materials cost was $109 per unit, and the direct labor cost was $13.90 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.
Transcribed Image Text: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 Activity Activit Measure y Rate Cost Pool Supporting direct labor Order processing Number of direct Number Batch of processing batches Number of orders Customer service labor- hours Number of customers $9 $ 87 per direct labor- hour per batch $ 285 per order $ 2,606 per customer The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $141.70 per unit, the direct materials cost was $109 per unit, and the direct labor cost was $13.90 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.
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