Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglidet 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 procesning Custom design processing Customer service Activity Rate $ 16 per direct labor-hour $ 108 per order $ 259 per cuntom design $ 420 per eustomer 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 13 Number of glidern Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materiale cont per glider 33.00 $1,650 $2,390 $ 444 S 572 26.50 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, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglidet 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 procesning Custom design processing Customer service Activity Rate $ 16 per direct labor-hour $ 108 per order $ 259 per cuntom design $ 420 per eustomer 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 13 Number of glidern Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materiale cont per glider 33.00 $1,650 $2,390 $ 444 S 572 26.50 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please answer properly
![Thermal Rising, Inc, 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 procenning
Custom design processing
Customer service
Activity Rate
$ 16 per direct labor-hour
$ 188 per order
$ 259 per custom design
$ 420 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
13
Number of glidern
Number of orders
Number of custom designs
Direct labor-hours per glider
Selling price per glider
Direct materiale cont per glider
3
26.50
33.00
$1,650 $2,390
444 S 572
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb26c1071-7c96-4aac-b283-dd50334d00f0%2Fa444e391-c710-4792-9c7a-caf70dbd4623%2Fp6ohgt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Thermal Rising, Inc, 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 procenning
Custom design processing
Customer service
Activity Rate
$ 16 per direct labor-hour
$ 188 per order
$ 259 per custom design
$ 420 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
13
Number of glidern
Number of orders
Number of custom designs
Direct labor-hours per glider
Selling price per glider
Direct materiale cont per glider
3
26.50
33.00
$1,650 $2,390
444 S 572
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
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education