Question

Roll Board Inc. manufactures several models of high-quality skateboards. The company's ABC system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Supporting direct labour Batch processing Order processing Activity Measure Activity Rate Number of direct labour-hours Number of batches 11 per direct labour-hour 89 per batch $ Number of orders 170 per order Customer service Number of Customers $1,290 per customer The company just completed a single order from SkateCo for 3,700 entry-level skateboards. The order was produced in 31 batches. Each skateboard required 0.5 direct labour-hours. The selling price was $130 per skateboard. the direct materials cost was $77.40 per skateboard, and the direct labour cost was $18.40 per skateboard. 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. Sales Costs Direct materials Direct labour Supporting direct labour Batch processing Order processing Customer service overhead Customer margin

Answer 1

Amount Amount $ 481,000 3700* $ 130 Sales Costs Direct Materials Direct Labour Supporting Direct Labour Batch processing Order Processing Customer Service Overhead Total Costs Customer Margin 3700* $ 77.40 3700* $ 18.40 3700* 0.5* $ 11 31* $ 89 1* $ 170 1* $ 1290 $286,380 $ 68,080 $ 20,350 $ 2,759 $ 170 $ 1,290 $ 379,029 $ 101,971 Note: Customer Margin = Sales - Total Costs