2 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 serviceManagement would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered thefollowing products over the last 12 months:Number of glidersNumber of ordersNumber of custom designsDirect labor-hours per gliderActivity Rate$ 18 per direct labor-hour$ 188 per order$ 269 per custom design$426 per customerSelling price per gliderDirect materials cost per gliderThe company's direct labor rate is $22 per hour.Customer marginStandardModel152027.50$ 1,925$ 474CustomDesign33334.00$ 2,490$ 580Required: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.)

Activity Based Costing (ABC Costing)Under the ABC Costing overheads are allocated on the basis of…

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 Activity Rate $ 18 per direct labor-hour $188 per order $ 269 per custom design $ 426 per customer 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 $22 per hour. Customer margin Standard Model 15 2 0 27.50 $ 1,925 $ 474 Custom Design 3 3 3 34.00 $ 2,490 $ 580 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.)

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 Activity Rate $ 18 per direct labor-hour $188 per order $ 269 per custom design $ 426 per customer 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 $22 per hour. Customer margin Standard Model 15 2 0 27.50 $ 1,925 $ 474 Custom Design 3 3 3 34.00 $ 2,490 $ 580 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.)

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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