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 Activity Rate $ 16 per direct labor-hour $ 200 per order $ 258 per custom design $ 430 per customer 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 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 $20 per hour. Required: Standard Model Custom Design 14 3 2 3 0 3 29.50 33.00 $ 2,410 $ 580 $ 1,800 $ 448 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.) Customer margin

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 Activity Rate $ 16 per direct labor-hour $ 200 per order $ 258 per custom design $ 430 per customer 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 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 $20 per hour. Required: Standard Model Custom Design 14 3 2 3 0 3 29.50 33.00 $ 2,410 $ 580 $ 1,800 $ 448 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.) Customer margin

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Description: Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standardparaglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with t

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 Activity Rate Supporting direct labor $ 22 per direct labor-hour Order processing $ 198 per order Custom design processing $ 252 per custom design Customer service $ 428 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 11 2 Number of orders 22 Number of custom designs 02 Direct labor-hours per glider 27.50 32.00 Selling price per glider $1,825 $2,490 Direct materials cost per glider $ 452 $ 570 The company's direct labor rate is $16 per hour. what is the customer margin?
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 Number of custom designs Direct labor-hours per glider Activity Rate $18 per direct labor-hour $ 192 per order $ 256 per custom design $432 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $22 per hour. Customer margin Standard Model 12 2 0 28.50 $ 1,800 $456 Custom Design 3 3 3 32.00 $ 2,480 $ 576 Required: Using the company's…