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 Activity Measure Activity Rate Supporting direct labor Number of direct labor-hours $ 13 per direct labor-hour Batch processing Number of batches $ 92 per batch Order processing Number of orders $ 271 per order Customer service Number of customers $ 2,607 per customer The company just completed a single order from Interstate Trucking for 1,700 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $141.50 per unit, the direct materials cost was $104 per unit, and the direct labor cost was $14.50 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.
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Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The compa...
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