Check my workThermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standardparaglider model, but also makes custom-designed paragliders. Management designed an activity-based costing system with thefollowing activity cost pools and activity rates:Activity Cost PoolSupporting direct laborOrder processingCustom design processingCustomer serviceActivity Rate$ 18 per direct labor-hour$ 194 per order$ 256 per custom design$ 430 per customerManagement wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the following products overthe last 12 months:Number of glidersNumber of ordersNumber of custom designsDirect labor-hours per gliderSelling price per gliderDirect materials cost per gliderStandardCustomModelDesign153230326.50$ 1,92534.00$ 2,470$ 448$ 584The company's direct labor rate is $22 per hour.Required:Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters.

Reference:Lagerweij, J. (2022, December 8). How to Do a Customer Profitability Analysis.…

Answered: Check my work Thermal Rising,…

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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Fisico Company produces exercise bikes. One of its plants produces two versions: a standard model and a deluxe model. The deluxe model has a wider and sturdier base and a variety of electronic gadgets to help the exerciser monitor heartbeat, calories burned, distance traveled, etc. At the beginning of the year, the following data were prepared for this plant: Additionally, the following overhead activity costs are reported: Required: 1. Calculate the cost per unit for each product using direct labor hours to assign all overhead costs. 2. Calculate activity rates and determine the overhead cost per unit. Compare these costs with those calculated using the unit-based method. Which cost is the most accurate? Explain.
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 $ 18 per direct labor-hour $ 192 per order $ 269 per custom design $ 422 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: Number of gliders Number of orders Number of custom designs Standard Custom Model Design 13 2 1 2 0 2 33.00 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: 30.50 $ 1,875 $ 444 $ 2,400 $ 576 Using the company's activity-based costing system,…
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 $ 18 per direct labor-hour $ 192 per order $266 per custom design $ 428 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 $16 per hour. Customer margin Standard Model 16 1 0 26.50 $1,900 $ 458 Custom Design 2 2 34.00 $ 2,480 $ 568 Required: Using the company's…
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 on activity-based costing system with the following activity cost pools and activity rates: ActIvity Cost Pool Supporting direct lebor Order processing Custon desion processing Customer service Activity Rate $416 per direct labor-hour $ 182 per order $ 261 per custon design $426 per custoner 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 Stenderd Model Custos Desion 2 2 Number of gilders Number of orders Number of custon des igns Direct iabor-hours per gtider Selling price per glider Direct naterlals cost per ollder 14 30.50 $1,875 $ 444 33.00 $2.450 $ 500 The company's direct labor rate is $22 per hour Required: Using the company's activity-based costing…
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 $ 26 per direct labor-hour $ 284 per order $ 186 per custom design $ 379 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: standard Custom Model Design Number of gliders Number of orders 20 1 3 Number of custom designs Direct labor-hours per glider selling price per glider Direct materials cost per glider 26.35 28.00 $ 1,850 $ 564 $ 2,400 $ 634 The company's direct labor rate is $19.50 per hour. Requlred: Using the company's activity-based costing…
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 $ 20 Activity Rate per direct labor-hour $ 186 per order Customer service $ 267 per custom design $ 426 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 $18 per hour. Required: Standard Custom Model Design 15 3 2 3 0 29.50 $ 1,875 $ 474 3 33.00 $ 2,420 $ 578 Using the company's activity-based…
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 $26 per direct labor-hour $ 284 per order $ 186 per custom design $ 379 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 Standard Model 20 1 Custom Design 3 3 26.35 $ 1,850 $ 564 3 28.00 $ 2,400 $ 634 The company's direct labor rate is $19.50 per hour. Required: Using the company's activity-based…
hermal Rising, Inc., 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 Activity Rate Supporting direct labor $22 per direct labor-hour Order processing $182 per order Custom design processing $254 per custom design Customer service $428 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: StandardModel CustomDesign Number of gliders 10 3 Number of orders 1 3 Number of custom designs 0 3 Direct labor-hours per glider 27.50 34.00 Selling price per glider $1,650 $2,310 Direct materials cost per glider $ 458 The company’s direct labor rate is $18 per hour. Required:…
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 $16 per direct labor-hour $188 per order $ 251 per custom design $ 434 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: Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Standard Model Selling price per glider Direct materials cost per glider The company's direct labor rate is $20 per hour. 15 1 0 29.50 $ 1,900 $ 472 Custom Design 3 3 3 33.00 $ 2,470 $ 580 Required: Using the company's activity-based costing system,…
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 $20 per direct labor-hour $184 per order $ 254 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 i Direct labor-hours per glider 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…

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