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 Activity Rate $12 per direct labor-hour $ 87 per batch $ 288 per order $ 2,613 per customer The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.7 direct labor-hours. The selling price was $142.30 per unit, the direct materials cost was $109 per unit, and the direct labor cost was $14.90 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. Interstate Trucking Customer Margin-ABC Analysis Costs: Customer margin

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 Activity Rate $12 per direct labor-hour $ 87 per batch $ 288 per order $ 2,613 per customer The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.7 direct labor-hours. The selling price was $142.30 per unit, the direct materials cost was $109 per unit, and the direct labor cost was $14.90 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. Interstate Trucking Customer Margin-ABC Analysis Costs: Customer margin

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 12E: Activity cost pools, activity rates, and product costs using activity-based costing Caldwell Home...

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