Roll Board Inc. manufactures several models of high-quality skateboards. The companys ABC system has four...
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Accounting
Roll Board Inc. manufactures several models of high-quality skateboards. The companys ABC 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 labour
Number of direct labour-hours
$
13
per direct labour-hour
Batch processing
Number of batches
$
90
per batch
Order processing
Number of orders
$
180
per order
Customer service
Number of customers
$
1,360
per customer
The company just completed a single order from SkateCo for 2,200 entry-level skateboards. The order was produced in 35 batches. Each skateboard required 0.9 direct labour-hours. The selling price was $135 per skateboard, the direct materials cost was $67.40 per skateboard, and the direct labour cost was $17.40 per direct labour-hour. This was the only order from SkateCo for the year.
Required:
Prepare a report showing the customer margin on sales to SkateCo for the year.
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