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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 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 i Direct labor-hours per glider Activity Rate $20 per direct labor-hour $184 per order 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: $ 254 per custom design $430 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 1 0 28.50 $ 1,925 $ 476 Custom Design 3 3 3 33.00 $ 2,460 $ 570 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 i Direct labor-hours per glider Activity Rate $20 per direct labor-hour $184 per order 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: $ 254 per custom design $430 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 1 0 28.50 $ 1,925 $ 476 Custom Design 3 3 3 33.00 $ 2,460 $ 570 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
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 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 i Direct labor-hours per glider $20 $184 Activity Rate per direct labor-hour per order 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: $ 254 per custom design $430 per customer Customer margin Selling price per glider Direct materials cost per glider The company's direct labor rate is $20 per hour. Standard Model 15 1 0 28.50 $ 1,925 $ 476 Custom Design 3 3 3 33.00 $ 2,460 $ 570 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.)
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 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 i Direct labor-hours per glider $20 $184 Activity Rate per direct labor-hour per order 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: $ 254 per custom design $430 per customer Customer margin Selling price per glider Direct materials cost per glider The company's direct labor rate is $20 per hour. Standard Model 15 1 0 28.50 $ 1,925 $ 476 Custom Design 3 3 3 33.00 $ 2,460 $ 570 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.)
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