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 Activity Measure Number of direct labor-hours Number of batches Number of orders Number of customers Activity Rate $10 per direct labor-hour $90 per batch Batch processing Order processing Customer service $ 286 per order $ 2,602 per customer The company just completed a single order from Interstate Trucking for 2,800 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.3 direct labor-hours. The selling price was $141.10 per unit, the direct materials cost was $102 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 on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis Costs
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 Activity Measure Number of direct labor-hours Number of batches Number of orders Number of customers Activity Rate $10 per direct labor-hour $90 per batch Batch processing Order processing Customer service $ 286 per order $ 2,602 per customer The company just completed a single order from Interstate Trucking for 2,800 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.3 direct labor-hours. The selling price was $141.10 per unit, the direct materials cost was $102 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 on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis Costs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Order processing
Customer service
Activity Measure
Number of direct labor-hours
Number of batches
Number of orders
Number of customers
Activity Rate
$10 per direct labor-hour
$90 per batch
$286 per order
$ 2,602 per customer
The company just completed a single order from Interstate Trucking for 2,800 custom seat cushions. The order was produced in four
batches. Each seat cushion required 0.3 direct labor-hours. The selling price was $141.10 per unit, the direct materials cost was $102
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 on sales to Interstate Trucking for the year.
Interstate Trucking
Customer Margin-ABC Analysis
ces
Costs
Customer margini
$
0
0
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