Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has astandard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-basedcosting system with the following activity cost pools and activity rates:Activity Cost PoolSupporting direct laborOrder processingCustom design processingCustomer serviceActivity Rate$ 18 per direct labor-hour$ 198 per order$ 259 per custon design$ 428 per custonerManagement would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered thefollowing products over the last 12 months:StandardCustom DesignModelNumber of glidersNumber of ordersNumber of custon designsDirect labor-hours per gliderSelling price per gliderDirect materials cost per glider14222229.50$ 1,925$ 45433.e0$ 2,400$ 58eThe company's direct labor rate Is $18 per hour.Requlred:Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Round yourIntermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with aminus sign.)Customer margin Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs for pricing and otherpurposes. The proprletor of the company believes that costs are driven prlmarly by the size of customer lawns, the size ofcustomer garden beds, the distance to travel to customers, and the number of customers. In addition, the costs of malntalninggarden beds depends on whether the beds are low malntenance beds (malnly ordinary trees and shrubs) or high malntenancebeds (malnly flowers and exotic plants). Accordingly, the company uses the five activity cost pools Ilisted below.Activity Cost PoolCaring for lawnCaring for garden beds-low naintenanceCaring for garden beds-high naintenanceTravel to jobsCustomer billing and serviceActivity MeasureSquare feet of lawnSquare feet of low naintenance bedsSquare feet of high naintenance bedsMilesNumber of customersThe company already has completed ts first stage allocations of costs and has summarized Its annual costs and activity asfollows:Estimated OverheadActivity Cost PoolCaring for lawnCaring for garden beds-low naintenanceCaring for garden beds-high maintenanceTravel to jobsCustomer billing and serviceCost$ 88, 200$ 32,800$ 47,430$ 4,480$ 9,100Expected Activity180,000 square feet of lawn23,000 square feet of lowN maintenance beds17,000 square feet of high maintenance beds14,000 miles28 customersRequlred:Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.)Activity Cost PoolActivity RateCaring for lawnper square feet of lawnCaring for garden bedsHow maintenanceper square feet of low maintenance bedsCaring for garden beds-high maintenanceper square feet of high maintenance bedsTravel to jobsper mileCustomer billing and serviceper customer

Name: Thermal Rising, Incorporated, makes paragliders for sale through spec
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Description: Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has astandard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-basedcosting system with th

Sales (14x 1925) +(2x2400) 31750 Less: direct material cost (14 x 454) +(2x580) 7516 Direct…

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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 $ 18 per direct labor-hour $ 198 per order $ 259 per custon design $ 428 per custoner 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 Design Model Number of gliders Number of orders Number of custon designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider 14 2 2 2 2 29.50 $ 1,925 $ 454 33.e0 $ 2,400 $ 58e The company's direct labor rate Is $18 per hour. Requlred: 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, 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 $ 18 per direct labor-hour $ 198 per order $ 259 per custon design $ 428 per custoner 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 Design Model Number of gliders Number of orders Number of custon designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider 14 2 2 2 2 29.50 $ 1,925 $ 454 33.e0 $ 2,400 $ 58e The company's direct labor rate Is $18 per hour. Requlred: 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

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Chapter1: Financial Statements And Business Decisions

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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 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 $ 18 per direct labor-hour $ 200 per order $ 264 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 Custom Design 15 2 2 2 0 2 30.50 34.00 $ 1,850 $ 452 $ 2,480 $ 582 The company's direct labor rate is $20 per hour. Required: Using the company's activity-based costing system,…
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…
Conspicuous Limo uses activity-based costing for its two models of stretch Hummer limousines: Big and Too Big. There are three activity cost pools related to production, with estimated costs and expected activity as follows: Amount of Activity Activity Cost Pool Estimated Cost Activity cost driver Big Too Big Fabrication $181,500 Labor hours 600 500 Painting $650,000 Machine hours 1,600 300 Finishing $2,750,000 Units 470 530 What are the activity rates for fabrication and painting?
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 Activity Rate Supporting direct labor $ 22 per direct labor-hour Order processing $ 198 per order Custom design processing $ 252 per custom design Customer service $ 428 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: Standard Model Custom Design Number of gliders 11 2 Number of orders 22 Number of custom designs 02 Direct labor-hours per glider 27.50 32.00 Selling price per glider $1,825 $2,490 Direct materials cost per glider $ 452 $ 570 The company's direct labor rate is $16 per hour. what is the customer margin?
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…
Julio produces two types of calculator, standard and deluxe. The company is currently using a traditional costing system with machine hours as the cost driver but is considering a move to activity-based costing. In preparing for the possible switch, Julio has identified two cost pools: materials handling and setup. The collected data follow: Standard Model Deluxe Model Number of machine hours 25,800 30,800 Number of material moves Number of setups 590 890 70 540 Total estimated overhead costs are $347,100, of which $170,200 is assigned to the material handling cost pool and $176,900 is assigned to the setup cost pool. Required: 1. Calculate the overhead assigned to each product using the traditional cost system. 2. Calculate the overhead assigned to each product using ABC.
Oakland Precision Products (OPP) manufactures and sells a variety of scales for the kitchen and office. OPP sells primarily to kitchenware stores, discount stores, and so on. Two of the scales it produces for kitchen use are the Cook and Baker. The Cook is a basic food scale. The Baker has a greater capacity and special features that facilitate adjusting baking recipes for more or fewer people. The following information is available: Costs per unit Direct materials. Direct labor Variable overhead Fixed overhead Total cost per unit Price Units produced and sold The average wage rate is $32 per hour. Variable overhead varies with the quantity of direct labor-hours. The plant has a capacity of 20,000 direct labor-hours, but current production uses only 17,750 direct labor-hours. Required: a. A nationwide kitchenware chain has offered to buy 30,000 Cook models and 15,000 Baker models if the price is lowered to $10.60 and $36.80, respectively, per unit. a-1. If OPP accepts the offer, how…
Themba Ltd manufactures two types of soccer balls, namely Training and Match balls. Fixed manufacturing overheads (FMO) are allocated to products using activity-based costing (ABC). Below is the Activity area and the FMO applicable to this area. Activity area Set-up costs Machine costs Quality inspections Fixed manufacturing overheads R 480 000 1 600 500 800 000 • Set-up costs: The manufacturing machines need to be set up before each production run. The balls are manufactured in production runs and each independent Training production run contains 250 balls and each independent Match production run contains 100 balls. • Machine cost: Temba's production process is highly automated, and it takes 15 machine minutes and 24 machine minutes to manufacture one Training and one Match ball respectively. • Quality inspections: Every 10th Match ball and every 200th Training ball is quality inspected. • Temba manufactured 500 000 Training balls and 100 000 Match balls. The total quality inspection…
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Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products over the last 12 months: Number of cases Number of orders. Direct labour-hours per case Selling price per case. Direct materials cost per case Sales Costs: Direct materials Direct labour Supporting manufacturing Order processing Customer service The company's direct labour rate is $30 per hour. Required: Using the company's ABC system, compute the customer margin of Cell City. Customer margin Standard Model 290 5 0.25 $49 $ 26 70 Deluxe Model 105 2 $ 0.40 $ 69 $29 70 (70)
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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 $ 16 per direct labor-hour $ 200 per order $ 258 per custom design $ 430 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: Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider The company's direct labor rate is $20 per hour. Required: Standard Model Custom Design 14 3 2 3 0 29.50 3 33.00 $ 2,410 $ 580 $ 1,800 $ 448 Using the company's activity-based…