Foam Products, Inc., makes foam seat cushions for the automotive and aerospace i

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 Supporting direct labor Batch processing Order processing Customer service Activity Measure Activity Rate Number of direct labor-hours Number of batches Number of orders Number of customers 12 per direct labor-hour 94 per batch 279 per order $ 2,623 per customer The company just completed a single order from Interstate Trucking for 1,500 custom seat cushions. The order was produced in five batches. Each seat cushion required O.8 direct labor-hours. The selling price was $141.60 per unit, the direct materials cost was $107 per unit, and the direct labor cost was $14.50 per unit. This was Interstate Trucking's only order during the year. Requlrec: Calculate the customer margin on sales to Interstate Trucking for the year. Trucking Customer Margin-ABC Analysis Costs: Customer margin

Explanation / Answer

Sales 212400 =1500*141.6 Costs: Direct materials 160500 =1500*107 Direct labor 21750 =1500*14.5 Supporting direct labor 14400 =1500*0.8*12 Batch processing 470 =94*5 Order processing 279 Customer service overhead 2623 200022 Customer margin 12378

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