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	Activity Measure	Activity Rate
Supporting direct labour	Number of direct labour-hours	$	17	per direct labour-hour
Batch processing	Number of batches	$	95	per batch
Order processing	Number of orders	$	175	per order
Customer service	Number of customers	$	1,240	per customer

The company just completed a single order from SkateCo for 3,950 entry-level skateboards. The order was produced in 33 batches. Each skateboard required 0.6 direct labour-hours. The selling price was $125 per skateboard, the direct materials cost was $76.90 per skateboard, and the direct labour cost was $18.90 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.

Answer 1