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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 Measure Number of direct labor-hours Activity Cost Pool Supporting direct labor Batch processing Order processing Activity Rate $ $ $ 12 per direct labor-hour 87 per batch Number of batches Number of orders 273 per order $ 2,605 per customer Customer service Number of customers The company just completed a single order from Interstate Trucking for 2,600 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $141.90 per unit, the direct materials cost was $101 per unit, and the direct labor cost was $14.00 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

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 Measure Number of direct labor-hours Activity Cost Pool Supporting direct labor Batch processing Order processing Activity Rate $ $ $ 12 per direct labor-hour 87 per batch Number of batches Number of orders 273 per order $ 2,605 per customer Customer service Number of customers The company just completed a single order from Interstate Trucking for 2,600 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $141.90 per unit, the direct materials cost was $101 per unit, and the direct labor cost was $14.00 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

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 12E: Activity cost pools, activity rates, and product costs using activity-based costing Caldwell Home...
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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 Activity Measure Activity Rate 12 per direct labor-hour 87 per batch 273 per order 2,605 per customer Number of direct labor-hours Number of batches Number of orders Customer service Number of customers The company just completed a single order from Interstate Trucking for 2,600 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $141.90 per unit, the direct materials cost was $101 per unit, and the direct labor cost was $14.00 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
Transcribed Image Text: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 Activity Measure Activity Rate 12 per direct labor-hour 87 per batch 273 per order 2,605 per customer Number of direct labor-hours Number of batches Number of orders Customer service Number of customers The company just completed a single order from Interstate Trucking for 2,600 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.4 direct labor-hours. The selling price was $141.90 per unit, the direct materials cost was $101 per unit, and the direct labor cost was $14.00 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
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