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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0ce123d7-ec28-4713-8995-d1c19687ec94%2Ff2f416b9-ad2b-440f-9667-e93bfc18d2e2%2Fpbrntdp_processed.jpeg&w=3840&q=75)
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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