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

Foam Products, Inc., 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:

Exercise 7-11 Second-Stage Allocation and Margin Calculations (LO7-4, LO7-5) Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The company's activity-based costing ctivity 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 Number of direct labor-hours Number of batches Number of orders Number of customers Activity Rate $ 12 per direct labor-hour $ 91 per batch $ 286 per order $ 2,616 per customer The company just completed a single order from Interstate Trucking for 1,600 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.7 direct labor-hours. The selling price was $141.10 per unit, the direct materials cost was $105 per unit, and the direct labor cost was $13.60 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