Q- 9:Thermal Rising, Inc., makes paragliders for sale throughspecialty sporting goods stores. The company has a standardparaglider model, but also makes custom-designed paragliders.Management has designed an activity-based costing system withthe following activity cost pools and activity rates:Activity Cost PoolSupporting direct labourhourActivity Rates$26 per direct labourCustomer serviceOrder processingCustom desigh processingdesign$379 per customer$284 per order$186 per customManagement would like an analysis of the profitability of aparticular customer, Eagle Wings, which has ordered thefollowing products over the last 12 months:Standard Model Custom designNo. of gliders203No of orders13No. of custom designsDirect labour hours per itemSelling price per unitDirect material cost per326.3528.00$1850$2,400glider$564$634The company's direct labour rate is $19.50 per hour.Required: Using the company's activity-based costing system,compute the customer margin of Thermal Rising

Name: Q- 9:Thermal Rising, Inc., makes paragliders for sale throughspecialt
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Description: Q- 9:Thermal Rising, Inc., makes paragliders for sale throughspecialty sporting goods stores. The company has a standardparaglider model, but also makes custom-designed paragliders.Management has designed an activity-based costing system withthe fol

Under activity based costing, different activities cost gave different rates.

Business

Accounting

Activity Cost Pool Supporting direct labour hour Activity Rates $26 per direct labour $379 per customer $284 per order $186 per custom Customer service Order processing Custom desigh processing design Management would like an analysis of the profitability of a particular customer, Eagle Wings, which has ordered the following products over the last 12 months: Standard Model Custom design No. of gliders 20 3 No of orders 1 3 No. of custom designs Direct labour hours per item Selling price per unit Direct material cost per glider 3 26.35 28.00 $1850 $2,400 $564 $634 The company's direct labour rate is $19.50 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Thermal Rising

Activity Cost Pool Supporting direct labour hour Activity Rates $26 per direct labour $379 per customer $284 per order $186 per custom Customer service Order processing Custom desigh processing design Management would like an analysis of the profitability of a particular customer, Eagle Wings, which has ordered the following products over the last 12 months: Standard Model Custom design No. of gliders 20 3 No of orders 1 3 No. of custom designs Direct labour hours per item Selling price per unit Direct material cost per glider 3 26.35 28.00 $1850 $2,400 $564 $634 The company's direct labour rate is $19.50 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Thermal Rising

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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paraglider model, but also makes custom-designed paragliders. Management designed an activity-based costing s following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Activity Rate $ 26 per direct labor-hour $ 284 per order $ 186 per custom design $ 379 per customer Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the follo the last 12 months: Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider Standard Custom Model Design 20 3 1 3. 0 3 26.35 28.00 $ 1,850 $ 564 $ 2,400 $ 634 The company's direct labor rate is $19.50 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount.
Resource Constraint Fairy Godmother Inc. (FGI) makes two products: Glass Slippers and Crystal Balls. FGI estimates they can sell 30,000 Glass Slippers and 20,000 Crystal Balls. Both products must be processed by the glass sanding machine, which has a capacity of 25,000 machine hours. Fairy Godmother Inc Production Information Per Unit Information Glass Slippers Crystal Balls Selling Price 25 15 Direct Materials 8 5 Direct Labor 8 4 Variable Overhead 2 2 Variable Selling 1 1 Machine Hours 4 .75 What is the contribution margin per unit for Crystal Balls? Group of answer choices 1.50 3 6 4
Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow: Basic Dominator Total Units produced 1,050 450 1,500 Machine-hours 3,800 1,800 5,600 Direct labor-hours 3,600 1,500 5,100 Direct materials costs $ 11,400 $ 3,400 $ 14,800 Direct labor costs $ 73,800 $39,800 $ 113,600 Manufacturing overhead costs $ 181,764 Total costs $ 310,164 Required: Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor costs to allocate overhead costs. (Round your answer to 2 decimal places.)
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Practice problem Lumber and Cabinetry. The Lumber Division is responsible for harvesting and preparing lumber for use; the Cabinetry Division produces custom-ordered cabinetry. The lumber produced by the Lumber Division has a variable cost of $3.00 per linear foot and full cost of $4.00. Comparable quality wood sells on the open market for $9.00 per linear foot.1. Assume you are the manager of the Cabinetry Division. Determine the maximum amount you would pay for lumber.2. Assume you are the manager of the Lumber Division. Determine the minimum amount you would charge for the lumber if you have excess capacity. Repeat assuming you have no excess capacity.
Activity Cost Driver Chosen asAllocation Base Conversion Cost Per Unit ofAllocation Base Materials handling Number of parts $1.00 Machining Machine hours 60.00 Packaging Number of finished units 2.00 Each windsock requires three parts and spends five minutes in the machining department. The total cost of direct materials and direct labor is $3.50 per windsock. Gale produces 20,000 windsocks each year and sells them at 140% of cost. The selling price per windsock is: Question 8 options: $13.50. $18.90. $16.10. $88.20.
Activity-Based Customer Costing Deeds Company sells custom-made machine parts to industrial equipment manufacturers by bidding cost plus 40 percent, where cost is defined as manufacturing cost plus order processing cost. There are two types of customers: those who place small, frequent orders and those who place larger, less frequent orders. Cost and sales information by customer category is provided below. Frequently OrderingCustomers Less FrequentlyOrdering Customers Sales orders 45,000 4,500 Order size 15 150 Average unit manufacturing cost $40 $40 Order-processing activity costs: Processing sales orders $2,878,500 Order-filling capacity is purchased in steps (order-processing clerks) of 1,000, each step costing $46,000; variable order-filling activity costs are $35 per order. The activity capacity is 55,000 orders; thus, the total order-filling cost is $4,262,500 [(55 steps × $46,000) + ($35…
Standard Cost Journal Entries Bellingham Company produced 4,400 units that require eight standard pounds per unit at a $8 standard price per pound. The company actually used 36,300 pounds in production. Journalize the entry to record the standard direct materials used in production. If an amount box does not require an entry, leave it blank.
Activity Cost Driver Chosen asAllocation Base Conversion Cost Per Unit ofAllocation Base Materials handling Number of parts $1.00 Machining Machine hours 60.00 Packaging Number of finished units 2.00 Each windsock requires three parts and spends five minutes in the machining department. The total cost of direct materials and direct labor is $3.50 per windsock. Gale produces 20,000 windsocks each year and sells them at 140% of cost. The total cost of producing the 20,000 windsocks is: Question 7 options: $160,000. $230,000. $270,000. $1,260,000.
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