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 Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Activity Rate per direct labor-hour per order per custom design 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: $ 20 $ 196 $ 258 $ 418 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $18 per hour. Customer margin Standard Model 1 30.50 $ 1,850 $ 470 Custom Design 3 3 31.00 $ 2,460 $ 566 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 Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Activity Rate per direct labor-hour per order per custom design 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: $ 20 $ 196 $ 258 $ 418 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $18 per hour. Customer margin Standard Model 1 30.50 $ 1,850 $ 470 Custom Design 3 3 31.00 $ 2,460 $ 566 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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