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:
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 DLHs.
Required:
What is the customer margin on sales to Schwerin Corporation for the year?

Question

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:
  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 DLHs.
Required:
What is the customer margin on sales to Schwerin Corporation for the year?

Quizplus · Accepted Answer

The Answer of 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:
  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 DLHs.
Required:
What is the customer margin on sales to Schwerin Corporation for the year?

Mcinture Enterprises Makes a Variety of Products That It Sells