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 Custon desion processing Custoner service Act ivity Rate 2416 per direct labor-hour 24182 per order $ 261 per cuiton 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 Stendard Model Custos Deslon 14 Number of gilders Namber of orders Number of custoa des igns Direct labor-hours per gilder Selling price per glider Direct aterlais cost per ollder 20 30.50 $1,875 %$ 444 33.00 $2.450 The company's direct labor rate is $22 per hour Required: Using the company's octivity-based costing system, compute the customer margin of Big Sky Outfitters. (Round your Intermediate calculations and finel answer to the nearest whole dollar emount. Loss amounts should be entered witha 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 Custon desion processing Custoner service Act ivity Rate 2416 per direct labor-hour 24182 per order $ 261 per cuiton 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 Stendard Model Custos Deslon 14 Number of gilders Namber of orders Number of custoa des igns Direct labor-hours per gilder Selling price per glider Direct aterlais cost per ollder 20 30.50 $1,875 %$ 444 33.00 $2.450 The company's direct labor rate is $22 per hour Required: Using the company's octivity-based costing system, compute the customer margin of Big Sky Outfitters. (Round your Intermediate calculations and finel answer to the nearest whole dollar emount. Loss amounts should be entered witha 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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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 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 system, compute the customer margin of Big Sky Outfitters. (Round your Intermediate
calculations and finel answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign)
Customer margin
1,268
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