Chapter $5$ Homework Exercises $($GRADED$)$

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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:

$16\mathrm{.}7$ points

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

Activity Rate

per direct labor$-$hour

per batch

per order

per customer

Check my work

The company just completed a single order from Interstate Trucking for $2,600$ custom seat cushions. The order was produced in four batches. Each seat cushion required $0\mathrm{.}7$ direct labor$-$hours. The selling price was $$142\mathrm{.}00$ per unit, the direct materials cost was $$104$ per unit, and the direct labor cost was $$14\mathrm{.}50$ 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.

$\backslash$table$[[$Interstate Trucking$],[,$Customer Margin$-$ABC Analysis,$],[$Costs:$,,],[,,],[,,],[,,],[,,],[,,],[,,],[,,],[$Customer margin,,$]]$

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