PROBLEM 4 (20 Points) Foam system has four activity cost pools as follows: Activ

Question

PROBLEM 4 (20 Points) Foam system has four activity cost pools as follows: Activity Cost Pool Supporting Direct Labor Batch Processing Order Processing Customer Service Activity Measure DLHs # of batches # of orders # of customers Activity Rate 55.55 per DLH KZ500 $107 per batch $275 per order Ki $2.463 per customer The company just completed a single order from Acme Trucking for 1,000 seat cushions. The order was produced in two batches. Each seat cushion required.25 direct labor hours The selling price was S20 per unit, the direct materials cost was $8.50 per unit and the direct labor cost was $6.00 per unit. This was Acme's only order during the year. REQUIRED: Calculate the customer margin on the sales to Acme. rer l000 unts 25 DLH 20 unit sell R (ovo 50 DM 850 DL 6.

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Statement showing margin on sale of Acme Particulats Calculation Amount Revenue (a) 1,000 * 20 20,000 Less cost:- Direct material 1,000 * 8.50 8,500 Direct labor 1,000 * 6 6,000 Overhead: Supporting direct labor (0.25 * 1,000) * 5.55 1,387.50 Batch processing 107 * 2 214 Order processing 275 * 1 275 Customer service 2,463 * 1 2,463 Total cost (b) 18,839.50 Customer Margin (a) - (b) 1,160.50

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