Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The paraglider model, but also makes custom-designed paragliders. Management has designed an activt ollowing 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 would like an analysis of the profitability of a particular customer, Big Sky Outfitters, whi products over the last 12 months: standard Custom Model Design Number of gliders Number of orders Number of custom designs Direct labor-hours per glider selling price per glider Direct materials cost per glider 20 3 3 e 3 26.35 $ 1,85e $ 564 28.00 $ 2,400 $ 634
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The paraglider model, but also makes custom-designed paragliders. Management has designed an activt ollowing 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 would like an analysis of the profitability of a particular customer, Big Sky Outfitters, whi products over the last 12 months: standard Custom Model Design Number of gliders Number of orders Number of custom designs Direct labor-hours per glider selling price per glider Direct materials cost per glider 20 3 3 e 3 26.35 $ 1,85e $ 564 28.00 $ 2,400 $ 634
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![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
Activity Rate
$ 26 per direct labor-hour
$ 284 per order
$ 186 per custom design
$ 379 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
Number of orders
20
1
3
Number of custom designs
Direct labor-hours per glider
selling price per glider
Direct materials cost per glider
26.35
28.00
$ 1,850
$ 564
$ 2,400
$ 634
The company's direct labor rate is $19.50 per hour.
Requlred:
Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Round your Intermedlate
calculations and final answer to the nearest whole dollar amount.)
Customer margin](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3cadaab7-0242-405d-ab75-d1a15c225b30%2F03ed4b63-d3a9-49be-b460-550f73e1631a%2Fi2atc1_processed.png&w=3840&q=75)
Transcribed Image Text: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
Activity Rate
$ 26 per direct labor-hour
$ 284 per order
$ 186 per custom design
$ 379 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
Number of orders
20
1
3
Number of custom designs
Direct labor-hours per glider
selling price per glider
Direct materials cost per glider
26.35
28.00
$ 1,850
$ 564
$ 2,400
$ 634
The company's direct labor rate is $19.50 per hour.
Requlred:
Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Round your Intermedlate
calculations and final answer to the nearest whole dollar amount.)
Customer margin
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