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 2,100 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.4 direct labor-hour. The selling price was $141.20 per unit, the direct materials cost was $105 per unit, and the direct labor cost was $14.20 per unit. This was Interstate Trucking's only order during the year. ► Required: Calculate the customer margin for Interstate Trucking Costs: Interstate Trucking Customer Margin-ABC Analysis Customer margin Activity Rate $ 13 per direct labor-hour $85 per batch $ 275 per order $ 2,605 per customer

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.