Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The companys...
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Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The companys activitybased 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 laborhours $ per direct laborhour
Batch processing Number of batches $ per batch
Order processing Number of orders $ per order
Customer service Number of customers $ per customer
The company just completed a single order from Interstate Trucking for custom seat cushions. The order was produced in three batches. Each seat cushion required direct laborhour. The selling price was $ per unit, the direct materials cost was $ per unit, and the direct labor cost was $ per unit. This was Interstate Truckings only order during the year.
Required:
Calculate the customer margin for Interstate Trucking.
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