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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 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 2,600 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $142.10 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. Costs: Required: Calculate the customer margin on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis Activity Rate $ 14 per direct labor-hour $ 87 per batch $ 288 per order $ 2,639 per customer $ 109

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 2,600 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $142.10 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. Costs: Required: Calculate the customer margin on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis Activity Rate $ 14 per direct labor-hour $ 87 per batch $ 288 per order $ 2,639 per customer $ 109

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 Order processing Customer service Activity Measure Number of direct labor-hours Number of batches Number of orders Number of customers Costs: The company just completed a single order from Interstate Trucking for 2,600 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $142.10 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. Interstate Trucking Customer Margin-ABC Analysis Customer margin $ $ Activity Rate $ 14 per direct labor-hour $87 per batch 109 $ 288 per order $ 2,639 per customer 0 109
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 Costs: The company just completed a single order from Interstate Trucking for 2,600 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $142.10 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. Interstate Trucking Customer Margin-ABC Analysis Customer margin $ $ Activity Rate $ 14 per direct labor-hour $87 per batch 109 $ 288 per order $ 2,639 per customer 0 109
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