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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 Activity Measure Supporting direct labor Batch processing Number of direct labor-hours Number of batches Order processing Customer service Number of orders Number of customers Activity Rate $14 per direct labor-hour $ 88 per batch $ 282 per order $ 2,629 per customer The company just completed a single order from Interstate Trucking for 1,500 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $141.40 per unit, the direct materials cost was $102

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 Activity Measure Supporting direct labor Batch processing Number of direct labor-hours Number of batches Order processing Customer service Number of orders Number of customers Activity Rate $14 per direct labor-hour $ 88 per batch $ 282 per order $ 2,629 per customer The company just completed a single order from Interstate Trucking for 1,500 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $141.40 per unit, the direct materials cost was $102

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 Activity Measure Number of direct labor-hours Number of batches Activity Rate $ 14 per direct labor-hour $ 88 per batch Order processing Customer service Number of orders Number of customers $ 282 per order $ 2,629 per customer The company just completed a single order from Interstate Trucking for 1,500 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $141.40 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. Costs: Interstate Trucking Customer Margin-ABC Analysis Customer margin
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 Cost Pool Supporting direct labor Batch processing Activity Measure Number of direct labor-hours Number of batches Activity Rate $ 14 per direct labor-hour $ 88 per batch Order processing Customer service Number of orders Number of customers $ 282 per order $ 2,629 per customer The company just completed a single order from Interstate Trucking for 1,500 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $141.40 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. Costs: Interstate Trucking Customer Margin-ABC Analysis Customer margin
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