paraglider model, but also makes custom-designed paragliders. Management designed an activity-based costing sfollowing activity cost pools and activity rates:Activity Cost PoolSupporting direct laborOrder processingCustom design processingCustomer serviceActivity Rate$ 26 per direct labor-hour$ 284 per order$ 186 per custom design$ 379 per customerManagement wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the follothe last 12 months:Number of glidersNumber of ordersNumber of custom designsDirect labor-hours per gliderSelling price per gliderDirect materials cost per gliderStandardCustomModelDesign20313.0326.3528.00$ 1,850$ 564$ 2,400$ 634The 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.

Activity based costing or ABC method includes multiple cost pools and multiple cost drivers. It is…

el, but also makes custom-designed paragliders. Management designed an activity-ba 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 ord 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 $ 2,400 $ 564 $ 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 Outfitte

el, but also makes custom-designed paragliders. Management designed an activity-ba 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 ord 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 $ 2,400 $ 564 $ 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 Outfitte

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Rahul
please answer within the format by providing formula the detailed workingPlease provide answer in text (Without image)Please provide answer in text (Without image)Please provide answer in text (Without image)
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 Coat Pool Supporting direct labor Order processing Custom design processing Customer service 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: Number of gliders Number of orders Number of custom designs Direct labor-houra per glider Activity Rate $ 20 per direct labor-hour $ 198 per order $267 per custom design $ 420 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $20 per hour. Customer margin Standard Model 14 2 0 27.50 $1,875 $ 472 Custom Design 2 2 2 34.00 $ 2,490 $586 Required: Using the company's…
Paradise Marine Sails manufactures sails for sailboats. The company’s capacity is 29,000 sails per month. They are currently producing 25,000 sails a month. Current production cost can be found in the chart below: Sales Price $200 Variable Cost Manufacturing Cost $100 Administrative Cost $50 Total Fixed Cost Manufacturing $500,000 Administrative $480,000 Should you accept a special order at a price of $170 for 3000 sails? Fixed cost will increase by $9,000 to produce these sails. Give a numerical justification Would your answer be different if the company was currently producing 28,000 sails?
Willis Company is trying to decide which of two bicycle wheels to manufacture next quarter. Cost data pertaining to the two choices follow. Multiple Choice Cost of materials per unit Cost of direct labor per unit Advertising cost per year 4,000 Depreciation on equipment 6,000 Which costs are relevant to the decision of which wheel to produce? Cost of materials and direct labor Wheel A $25 30 Cost of direct labor, advertising, and depreciation Cost of materials, direct labor and advertising Cost of advertising and depreciation Wheel XZ $45 35 7,000 9,000
Group work problems 1) The Rick Shaw Chair company makes twb types of rocking chairs, a plain chair and a fancy chair. Each rocking chair must be assembled and then finished. The plain chair takes 4 hours to assemble and 4 hours to finish. The fancy chair takes 8 hours to assemble and 12 hours to finish. The company can provide at most 160 worker-hours of assembling and 180 worker-hours of finishing a day. If the profit on a plain chair is $40 and the profit on a fancy chair is $65, how many rocking chairs of each type should the company make per day to maximize profits? What is the maximum profit?
Mosbius Designs, an architectural firm based in the Upper West Side of New York. Currently, Mosbius Designs is run single-handedly by its owner, Ted Mosby. Ted is considering hiring an assistant, PJ, to help him answer phone calls as business picks up. For the year ended December 31, 2009, Mosbius Designs produced 200 design plans. The following information was provided for 2009: Sales Revenue $250,000 Variable Costs $50,000 Fixed Costs $25,000 If the company hires PJ, Ted believes he can raise the price of each design by $250 due to the improved level of customer service. He will also be able to produce 50 more designs in a year with the extra time. However, the annual fixed costs will increase by the amount of PJ's salary, $55,000. Based on the above information, which of the following statements is incorrect? Question 5 options: The company's contribution margin per unit in 2009 was $1,000. If the company hires PJ, the company must make $96,000…
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 Supporting direct labor Order processing Custom design processing Customer service 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: Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Activity Rate $18 per direct labor-hour $ 192 per order $ 256 per custom design $432 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $22 per hour. Customer margin Standard Model 12 2 0 28.50 $ 1,800 $456 Custom Design 3 3 3 32.00 $ 2,480 $ 576 Required: Using the company's…
Vijay
Please answer quick in 30 minutes. Prepare a comprehensive report to management highlighting three-year make-or-buy unit cost analysis and recommend appropriate action. What are the other non-cost variables that would be helpful in this analysis? As a manufacturing analyst, you are a member of a make-or-buy review team for electric components and work for a multinational company, TransAll Ltd. Your marketing group estimates the following volumes for a component required for motor assembly: Year 1; 300,000 units, Year 2: 500,000 units, Year 3: 200,000 units. A Chinese supplier has quoted the price as Mu(monetary unit) 0.10 per unit with 10 % price decrease per year for year 2 and 3 for the same component. . Shipping and handling costs are expected to be Mu 0.01 per unit for years 1 through 3. Additional inventory handling charges are Mu 0.005 per unit. In addition, purchasing costs are estimated at Mu 20 per purchase order with a purchase order being released every month for the…