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 that ABC system are listed below:?Activity Cost PoolActivity MeasureActivity Rate?Supporting assemblyDirect labor-hours (DLHs)$4.20per DLH?Processing batchesNumber of batches$123.35per batch?Processing ordersNumber of orders$71.00per order?Serving customersNumber of customers$2,334.00 per customerThe 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 DLHs.Required:What is the customer margin on sales to Schwerin Corporation for the year?
What will be an ideal response?
| ? | Customer Margin-ABC Analysis | ? | ? |
| ? | Sales (1,100 units × $28.40 per unit) | ? | $31,240.00 |
| ? | Costs: | ? | ? |
| ? | Direct materials ($8.40 per unit × 1,100 units) | $9,240.00 | ? |
| ? | Direct labor ($1.80 per unit × 1,100 units) | 1,980.00 | ? |
| ? | Supporting assembly ($4.20 per DLH × 0.10 DLHs per unit × 1,100 units) | 462.00 | ? |
| ? | Processing batches ($123.35 per batch × 6 batches) | 740.10 | ? |
| ? | Processing orders ($71.00 per order × 2 orders) | 142.00 | ? |
| ? | Servicing customers ($2,334.00 per customer × 1 customer) | 2,334.00 | 14,898.10 |
| ? | Customer margin | ? | $16,341.90 |
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