Asked by Nicholas Paradas on Apr 27, 2024
Verified
Mcinture Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning thatactivity-based costing system are listed below:
The cost of serving customers, $2,334.00 per customer, is the cost of serving a customer for one year.
Schwerin Corporation buys only one of the company's products which Mcinture Enterprises sells for $28.40 per unit. Last year Schwerin Corporation ordered a total of 1,100 units of this product in 2 orders. To fill the orders, 6 batches were required. The direct materials cost is $8.40 per unit and the direct labor cost is $1.80 per unit. Each unit requires 0.10 direct labor-hours.
Required:What is the customer margin on sales to Schwerin Corporation for the year?
Activity-Based Costing
A cost distribution method that assigns overhead and indirect expenses to pertinent products and services based on their activity requirements.
Customer Margin
The profit derived from serving a particular customer, calculated as sales revenue minus the costs of servicing that customer.
Serving Customers
The process or actions taken to provide goods or services to customers in a way that meets or exceeds their expectations.
- Compute the expenses associated with customer service and order processing within an activity-based costing framework.
Verified Answer
Learning Objectives
- Compute the expenses associated with customer service and order processing within an activity-based costing framework.
Related questions
Spigelmyer Enterprises Makes a Variety of Products That It Sells ...
Orick Enterprises Makes a Variety of Products That It Sells ...
Krueger Corporation Is Conducting a Time-Driven Activity-Based Costing Study in ...
Lindenmuth Corporation Is Conducting a Time-Driven Activity-Based Costing Study in ...
Callum Corporation Is Conducting a Time-Driven Activity-Based Costing Study in ...