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 $20 per direct labor-hour $ 192 per order $ 265 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: Standard Model Custom Design 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 $18 per hour. Required: 15 200 28.50 $ 1,850 $ 470 2220 34.00 $ 2,480 $ 572 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 Activity Rate $20 per direct labor-hour $ 192 per order $ 265 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: Standard Model Custom Design 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 $18 per hour. Required: 15 200 28.50 $ 1,850 $ 470 2220 34.00 $ 2,480 $ 572 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.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4BE: Activity-based costing: selling and administrative expenses Jungle Junior Company manufactures and...
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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
$20 per direct labor-hour
$ 192 per order
$ 265 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:
Standard
Model
Custom Design
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 $18 per hour.
Required:
15
200
28.50
$ 1,850
$ 470
2220
34.00
$ 2,480
$ 572
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F523fe746-e943-4c0d-959c-e635f9b9a664%2Ff94f54f4-16ed-4941-b47f-adb40109ad8c%2Fq2k9zhd_processed.jpeg&w=3840&q=75)
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
Activity Rate
$20 per direct labor-hour
$ 192 per order
$ 265 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:
Standard
Model
Custom Design
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 $18 per hour.
Required:
15
200
28.50
$ 1,850
$ 470
2220
34.00
$ 2,480
$ 572
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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