Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. Thecompany has a standard paraglider model, but also makes custom-designed paragliders. Management hasdesigned an activity-based costing system with the following activity cost pools and activity rates:Activity Cost PoolSupporting direct laborOrder processingCustom design processingCustomer serviceNumber of glidersNumber of ordersManagement would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which hasordered the following products over the last 12 months:Number of custom designsDirect labor-hours per gliderActivity Rate$ 20 per direct labor-hour$ 198 per order$ 265 per custom design$ 422 per customerSelling price per gliderDirect materials cost per gliderThe company's direct labor rate is $16 per hour.Customer marginStandardModel131028.50$ 1,925$ 452Custom Design33331.00$ 2,420$ 584Required: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 amountsshould be entered with a minus sign.)

Particular Amount ($)Sales 32285Direct material cost of grinder 7628Direct labor cost…

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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Please help me with Req 4. If someone can help I will give a thumbs up. If you zoom in I believe the image should beome clearer. Thanks!
Chocolate Bars, Inc. (CBI), manufactures creamy deluxe chocolate candy bars. The firm has developed three distinct products: Almond Dream, Krispy Krackle, and Creamy Crunch. CBI is profitable, but management is quite concerned about the profitability of each product and the product costing methods currently employed. In particular, management questions whether the overhead allocation base of direct labor-hours accurately reflects the costs incurred during the production process of each product. Skipped In reviewing cost reports with the marketing manager, Steve Hoffman, who is the cost accountant, notices that Creamy Crunch appears exceptionally profitable and that Almond Dream appears to be produced at a loss. This surprises both him and the manager, and after much discussion, they are convinced that the cost accounting system is at fault and that Almond Dream is performing very well at the current market price. Steve decides to hire Jean Sharpe, a management consultant, to study the…

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