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 $ 94 per batch
Order processing Number of orders $ 289 per order
Customer service Number of customers $ 2,622 per customer
The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $141.60 per unit, the direct materials cost was $112 per unit, and the direct labor cost was $14.00 per unit. This was Interstate Trucking’s only order during the year.
Required:
Prepare a report showing the customer margin on sales to Interstate Trucking for the year.