Second-Stage Allocation and Margin Calculations LO 5–4, LO 5–5 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 $5.55 per direct labor-hour Batch processing Number of batches $107.00 per batch Order processing . Number of orders $275.00 per order Customer service . Number of customers $2,463.00 per customer The company just completed a single order from Interstate Trucking for 1,000 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.25 direct laborhours.

The selling price was $20 per unit, the direct materials cost was $8.50 per unit, and the direct labor cost was $6.00 per unit. This was Interstate Trucking’s only order during the year.

Required:

Using Exhibit 5–12 as a guide, calculate the customer margin on sales to Interstate Trucking for the year.