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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 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 Activity Rate $ 20 per direct labor-hour $186 per order. $ 252 per custom design $426 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 15 2 0 27.50 $1,900 $ 478 Custom Design 2 2 2 34.00 $ 2,440 $ 584 Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. Note: 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 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 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 Activity Rate $ 20 per direct labor-hour $186 per order. $ 252 per custom design $426 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 15 2 0 27.50 $1,900 $ 478 Custom Design 2 2 2 34.00 $ 2,440 $ 584 Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.

FINANCIAL ACCOUNTING
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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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 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 Activity Rate $20 per direct labor-hour $186 per order. $ 252 per custom design $426 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 15 2 0 27.50 $1,900 $ 478 Custom Design 2 2 2 34.00 $ 2,440 $ 584 Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.
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 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 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 Activity Rate $20 per direct labor-hour $186 per order. $ 252 per custom design $426 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 15 2 0 27.50 $1,900 $ 478 Custom Design 2 2 2 34.00 $ 2,440 $ 584 Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.
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