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:

 

Activity Cost Pool	Activity Measure	Activity Rate
Supporting direct labor	Number of direct labor-hours	$	15	per direct labor-hour
Batch processing	Number of batches	$	95	per batch
Order processing	Number of orders	$	271	per order
Customer service	Number of customers	$	2,614	per customer

 

The company just completed a single order from Interstate Trucking for 1,700 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $142.40 per unit, the direct materials cost was$101 per unit, and the direct labor cost was $13.60 per unit. This was Interstate Truckings only order during the year.

 

Required:

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

Answer rating: 100% (QA)

Solution Customer Margin Analysis Sales 242080 Cost Direct ... View the full answer