50.1K

Verified Solution

Link Copied!

Thermal Rising. Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Activity Rate Supporting direct labor $ 18 per direct labor-hour Order processing $ 188 per order Canton design processing $ 270 per custon design Customer service $ 428 per customer Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months Standard custom Model Design Number of gliders 13 2 Number of orders 2 2 Number of custom designs 0 2 Direct labor-hours per glider 26.50 32.00 Selling price per glider $ 1.050 $ 2,480 Direct materials cost per glider 5476 The company's direct labor rate is $16 per hour Required: Using the company's activity based costing system, compute the customer margin of Big Sky Outfitters (Round your Intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.) Customer margin Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model , but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Activity Rate Supporting direct labor $ 18 per direct labor-hour Order processing $ 188 per order Custom design processing $ 270 per custom design Customer service $ 428 per customer Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months Standard Custom Model Design Number of gliders 13 Number of orders 2 2 Number of custom designs 0 2 Direct labor-hours per glider 26.50 32.00 Selling price per glider $ 1,850 $ 2,480 Direct materials cost per glider 5476 $ 568 The company's direct labor rate is $16 per hour Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters, (Round your intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.)

Answer & Explanation Solved by verified expert

See Answer