Assignment:
Theatre Seating, Inc., makes high-quality adjustable seats for theaters. 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
|
|
$ 14
|
per direct labor-hour
|
|
Batch processing
|
Number of batches
|
|
$ 90
|
per batch
|
|
Order processing
|
Number of orders
|
|
$ 276
|
per order
|
|
Customer service
|
Number of customers
|
|
$ 2,618
|
per customer
|
|
The company just completed a single order from CineMax Entertainment Corporation for 1,900 custom seats. The order was produced in four batches. Each seat required 0.6 direct labor hours. The selling price was $141.90 per seat, the direct materials cost was $109 per seat, and the direct labor cost was $15.00 per seat. This was the only order from CineMax Entertainment for the year.
Required:
Prepare a report showing the customer margin on sales to CineMax Entertainment for the year.