Exercise 7-11 (Algo) Second-Stage Allocation and Margin Calculations [LO7-4, LO7-5]

Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The companys 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	$ 11	per direct labor-hour
Batch processing	Number of batches	$ 88	per batch
Order processing	Number of orders	$ 271	per order
Customer service	Number of customers	$ 2,637	per customer

The company just completed a single order from Interstate Trucking for 2,700 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.8 direct labor-hours. The selling price was $141.90 per unit, the direct materials cost was $104 per unit, and the direct labor cost was $13.70 per unit. This was Interstate Truckings only order during the year.

Required:

Calculate the customer margin on sales to Interstate Trucking for the year.

Exercise 7-11 (Algo) Second-Stage Allocation and Margin Calculations (L07-4, LO7-5] 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 Activity Measure Activity Rate Supporting direct labor Number of direct labor-hours $ 11 per direct labor-hour Batch processing Number of batches $ 88 per batch Order processing Number of orders $ 271 per order Customer service Number of customers $ 2,637 per customer The company Just completed a single order from Interstate Trucking for 2700 custom seat cushions. The order was produced in five batches. Each seat cushion required 0.8 direct labor-hours. The selling price was $141.90 per unit, the direct materials cost was $104 per unit and the direct labor cost was $13.70 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 Customer margin