Question

Documenti - Word WTM Review Search OB 20. me Insert Design Layout References Mailings Calibri (Body) - 11 A A Aa A E at Porter BI .XX A.P.A. E View Help . 221 . 0. AaBbccbd AaBbccbd AaBb AaBbcc AaB AaBCD Abod AaBbceod al 1 Normal 1 No Spac... Heading 1 Heading 2 Subtitle Subtle Em.. Emphasis inte E df Styles 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: $ Astivity Cost Pool Supporting direct labor Batch processing Order processing Customer servise Activity Measure Number of direct labor-hours Number of batches Number of orders Number of customers Activity Rate 10 per direct labor-hour 6 per batch 272 per order 2,625 per customer $ The company just completed a single order from Interstate Trucking for 2.200 custom seat cushions. The order was produced in two batches. Each seat cushion required 07 direct labor-hours. The selling price was $14130 per unit, the direct materials cost was $107 per unit, and the direct labor cost was $14.20 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 Customer margin mom - Type here to search

Answer 1

Calculation of customer margin on sales to interstate trucking for the year

Interstate Trucking

Customer Margin - ABC Analysis

Sales (2,200units×$141.30)		$310,860
Costs:
Direct materials (2,200units×$107)	$235,400
Direct Labour (2,200units×$14.20)	$31,240
Supporting direct Labour ($10 per DLH × 0.7 DLH per unit × 2,200 units)	$15,400
Batch processing ($96per batch×2 batches)	$192
Order processing ($272per order×1order)	$272
Customer service overhead($2,625per customer×1 customer)	$2,625
		($285,129)
Customer Margin		$25,731

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