Question 1 (of value 10.00 points Foam Products, Inc., makes foam seat cushions

Question

Question 1 (of value 10.00 points 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 Supporting direct labor Batch processing Order processing Customer service Activity Measure Activity Rate $ 12 per direct labor-hour Number of direct labor-hours Number of batches Number of orders Number of customers S 88 per batch S 286 per order $ 2,603 per customer The company just completed a single order from Interstate Trucking for 2,100 custom seat The order was produced in four batches. Each seat cushion required 0.7 direct labor-hours. Thel selling price was $142.00 per unit, the direct materials cost was $105 per unit, and the direct labor cost was $13.80 per unit. This was Interstate Trucking's only order during the year Required: Prepare a report showing the customer margin on sales to Interstate Trucking for the year Interstate Trucking Customer Margin-ABC Analysis Costs DOLL

Explanation / Answer

Interstate Trucking Customer Margin - ABC Analysis Particulars Calculation $ $ Sales 2100*142 298200 Costs Direct Materials 2100*105 220500 Direct Labor 2100*13.8 28980 Support Direct Labor 12*0.7*2100 17640 Batch Processing 88*4 352 Order Processing 286*1 286 Customer Service Overheads 2603*1 2603 270361 Customer Margin 27839

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