Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standardparaglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with thefollowing 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 would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the followingproducts over the last 12 months:standardCustomModelDesignNumber of glidersNumber of orders2013Number of custom designsDirect labor-hours per gliderselling price per gliderDirect materials cost per glider26.3528.00$ 1,850$ 564$ 2,400$ 634The 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 Intermedlatecalculations and final answer to the nearest whole dollar amount.)Customer margin

Solution: Computation of Total Overhead cost assigned to Customer Big Sky Activity Cost Pool…

Answered: Thermal Rising, Incorporated, makes…

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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Blossom, Incorporated, is a small company that manufactures three versions of patio tables. Unit information for its products follows: Sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Required number of labor hours. Required number of machine hours Required 1 Required 2 Table A $43 Product 7 1 3 8 Complete this question by entering your answers in the tabs below. Required 3 Required 4 Table A Table B Table C 0.50 4.00 Blossom has determined it can sell a limited number of each table in the upcoming year. Expected demand for each model follows: Table A 50,000 units 30,000 units 20,000 units Table B $ 47 8 3 3 8 Table B Table C Required: 1. Suppose direct labor hours have been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank, i.e., ordering the products from 1 to 3. 2. If Blossom has only 45,000 direct labor hours available, calculate the number of units of each table Blossom should…
Stenback Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data: (Click the icon to view the data.) Prepare an analysis to show which product the company should emphasize. (Enter the units displayed per square foot - X Data table CIDS Product Per Item Designer Designer Moderately Priced 180 $ Units displayed per square foot: 65 Designer Moderately priced Contribution margin per unit Contribution margin per square foot of display space Capacity-Square feet of display space Total contribution margin at capacity ▼ Decision: * esc #t a $ 1 2 3 4 LOL WIER 15 % 5 T 6 44. & Y hp 7 FIS . 00 8 19 Average sale price Average variable costs Average contribution margin 115 20 Average fixed costs (allocated) Average operating income $ 95 $ 56 The Stenback Company store in Grand Junction, Colorado, has 11,000 square feet of floor space. If Stenback Company emphasizes moderately…
ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Expected sales (in cases) Selling price per case Direct labor hours. Machine hours Receiving orders Packing orders Direct labor benefits. Machine costs Receiving department Machine costs Receiving department Packing department Total costs *All depreciation Break-even cases of Rose Fixed $ Break-even cases of Violet Break-even cases of Rose Material cost per case Direct labor cost per case The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhea costs follow. They are classified as fixed or variable with respect to direct labor hours. Rose 242,000 135,500 Break-even cases of Violet 58,000 11,600 $103 33,650 9,400 214,500 242,000 52 99 $53 Violet $12 5,750 $81 2,750 $592,000 $394,000 214,500* 193,060 27 49 $40 Variable $8 $200,940 Required: 1. Using…
ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Rose Violet Expected sales (in cases) Selling price per case Direct labor hours Machine hours Direct labor benefits Machine costs Receiving department Packing department Total costs Receiving orders Packing orders Material cost per case Direct labor cost per case $11 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed *All depreciation $ 51,000 10,200 $81 32,000 6,400 9,750 3,500 Break-even cases of Rose Break-even cases of Violet 182,500 $99 214,500 136,500 $533,500 50 96 $50 27 45 $44 $5 Variable $165,120 218,880 $384,000 Required: 1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that…
Stylish Sitting is a retailer of office chairs located in San Francisco, California. Due to increased market competition, the CFO of Stylish Sitting has grown worried about the firm's upcoming income stream. The CFO asked you to use the company financial information provided below. Sales price $ 73.00 Per-unit variable costs: Invoice cost 40.45 Sales commissions 17.45 Total per-unit variable costs $ 57.90 Total annual fixed costs: Advertising $ 54,500 Rent 77,000 Salaries 225,000 Total annual fixed costs $ 356,500 If 38,900 office chairs were sold, Stylish Sitting's operating income (πB) would be: (Do not round intermediate calculations.) Multiple Choice $230,890. $270,890. $200,890. $330,890.
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 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 $ 20 per direct labor-hour $ 192 per order $ 265 per custom design $ 432 per customer Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the following products over 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 Model 15 2 0 28.50 $ 1,850 $470 Custom Design 222 34.00 $ 2,480 $ 572 The company's direct labor rate is $18 per hour. Required: Using the company's activity-based costing system,…
Sailmaster makes high-performance sails for competitive windsurfers. Below is information about the inputs and outputs for one model, the Windy 2000. Units sold Sale price each Total labor hours Wage rate Total materials Total energy 1,231 $ 1,715 46,452 $ 12 $61,150 $ 4,009 Productivity per hour Calculate the productivity in sales revenue/labor expense. Note: Round your answer to 2 decimal places.
K Moore Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data: (Click the icon to view the data.) Prepare an analysis to show which product the company should emphasize. (Enter the units displayed per square foot and the contribution margin per square foot to two decimal places.) Units displayed per square foot: Designer Moderately priced Contribution margin per unit Contribution margin per square foot of display space Capacity-Square feet of display space Total contribution margin at capacity Product Data table Designer Moderately Priced Per Item Designer Moderately Priced Average sale price 185 $ 87 Average variable costs 105 22 Average contribution margin 80 65 Average fixed costs (allocated) Average operating income 20 10 $ 60 $ 55 The Moore Company store in Grand Junction, Colorado, has 14,000 square feet of floor space. If Moore Company emphasizes moderately…
Manji
bok int int rences Outdoor Luggage, Incorporated, makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below: Selling price per unit Variable cost per unit 4. Which product offers the most profitable use of the plastic pellets? 5. Which product has the largest contribution margin per unit? Required 1 Required 2 Required 3 Required 4 Ski Guard Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit Required: 1. If the total time available on the plastic injection molding machine is the constraint, how much contribution margin per minute of the constrained resource is earned by each product? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. If a severe shortage of plastic pellets required the company to cut back production so much that its new constraint has become the total available pounds of plastic pellets, how much…
Denger
Cal’s Sporting Goods has three product lines and has decided to apply ABC analysis to these three product lines: Running, Golfing and Kayaking. He identifies four activities and their activity cost rates as follows: Ordering $95 per purchase order Delivery and receipt of merchandise $76 per delivery Shelf stocking $19 per hour Customer support and assistance $0.15 per item sold. The revenues, cost of goods sold and activity usage are listed below: Running Golfing Kayaking Financial Data Revenues $60,000 $66,500 $50,500 Cost of goods sold $41,000 $51,000 $32,000 Store support costs (overhead) Activity Area Usage Ordering (purchase orders 44 24 14 Delivery (deliveries) 120 60 36 Shelf stocking (hours) 170 150 20 Customer support (items sold) 15,400 20,200 7,960 Under the simple costing system. Cal’s Sporting Goods…

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