Exercise 5-11 (Algo) Second-Stage Allocation and Margin Calculations [LO5-4, LO5-5] Foam Products, Incorporated, 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 Activity Measure Number of direct labor-hours Batch processing Order processing Customer service Number of batches Number of orders Number of customers Activity Rate $12 per direct labor-hour $ 92 per batch $ 278 per order $ 2,632 per customer The company just completed a single order from Interstate Trucking for 2,700 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $141.20 per unit, the direct materials cost was $110 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 Sales Costs: Supporting direct labor Batch processing Order processing Customer service overhead Prev 6 of 6 Next Check my work
Exercise 5-11 (Algo) Second-Stage Allocation and Margin Calculations [LO5-4, LO5-5] Foam Products, Incorporated, 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 Activity Measure Number of direct labor-hours Batch processing Order processing Customer service Number of batches Number of orders Number of customers Activity Rate $12 per direct labor-hour $ 92 per batch $ 278 per order $ 2,632 per customer The company just completed a single order from Interstate Trucking for 2,700 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $141.20 per unit, the direct materials cost was $110 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 Sales Costs: Supporting direct labor Batch processing Order processing Customer service overhead Prev 6 of 6 Next Check my work
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 5-11 (Algo) Second-Stage Allocation and Margin Calculations [LO5-4, LO5-5]
Foam Products, Incorporated, 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
Activity Measure
Number of direct labor-hours
Batch processing
Order processing
Customer service
Number of batches
Number of orders
Number of customers
Activity Rate
$12 per direct labor-hour
$ 92 per batch
$ 278 per order
$ 2,632 per customer
The company just completed a single order from Interstate Trucking for 2,700 custom seat cushions. The order was produced in two
batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $141.20 per unit, the direct materials cost was $110
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
Sales
Costs:
Supporting direct labor
Batch processing
Order processing
Customer service overhead
Prev
6 of 6
Next
Check my work](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1b7c8b6d-818b-40c2-bea0-ebc9e1a4aa1f%2Fbf0df769-a49e-42b4-8cb3-f9616e7ab4df%2F9p7iyd_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 5-11 (Algo) Second-Stage Allocation and Margin Calculations [LO5-4, LO5-5]
Foam Products, Incorporated, 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
Activity Measure
Number of direct labor-hours
Batch processing
Order processing
Customer service
Number of batches
Number of orders
Number of customers
Activity Rate
$12 per direct labor-hour
$ 92 per batch
$ 278 per order
$ 2,632 per customer
The company just completed a single order from Interstate Trucking for 2,700 custom seat cushions. The order was produced in two
batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $141.20 per unit, the direct materials cost was $110
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
Sales
Costs:
Supporting direct labor
Batch processing
Order processing
Customer service overhead
Prev
6 of 6
Next
Check my work
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