Question

Foam Products, Inc., 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 Activity Rate Supporting direct labor Number of direct labor-hours $ 13 per direct labor-hour Batch processing Number of batches $ 92 per batch Order processing Number of orders $ 282 per order Customer service Number of customers $ 2,609 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 0.3 direct labor-hours. The selling price was $141.70 per unit, the direct materials cost was $101 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: 0

          Foam Products, Inc., 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
Activity Rate
Supporting direct labor
Number of direct labor-hours
$ 13 per direct labor-hour
Batch processing
Number of batches
$ 92 per batch
Order processing
Number of orders
$ 282 per order
Customer service
Number of customers
$ 2,609 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 0.3 direct labor-hours. The selling price was $141.70 per unit, the direct materials cost was $101
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:
0

Foam Products, Inc., 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
Activity Rate
Supporting direct labor
Number of direct labor-hours
13 per direct labor-hour
Batch processing
Number of batches 92 per batch
Order processing
Number of orders
282 per order
Customer service
Number of customers 2,609 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 0.3 direct labor-hours. The selling price was 141.70 per unit, the direct materials cost was101
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:
0

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