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 thefollowing activity cost pools and activity rates:Activity Cost PoolSupporting direct laborOrder processingCustom design processingCustomer serviceManagement would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the followingproducts over the last 12 months:Number of glidersNumber of ordersNumber of custom designsDirect labor-hours per gliderActivity Rate$18 per direct labor-hour$ 192 per order$ 256 per custom design$432 per customerSelling price per gliderDirect materials cost per gliderThe company's direct labor rate is $22 per hour.Customer marginStandardModel122028.50$ 1,800$456Custom Design33332.00$ 2,480$ 576Required:Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Round your intermediatecalculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.)

Activity-based costing is used to allocate overhead expenses on the basis of activity. Other than…

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 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 Activity Rate $18 per direct labor-hour 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 custom designs Direct labor-hours per glider $ 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 ur. 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 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 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 Activity Rate $18 per direct labor-hour 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 custom designs Direct labor-hours per glider $ 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 ur. 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 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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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