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Customer Margin, using activity-based costing system, Managerial Accoutning? Updraft Systems, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard
Customer Margin, using activity-based costing system, Managerial Accoutning?
Updraft Systems, 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 manufacturing - $18 per direct labor-hour Order processing - $192 per order Custom designing - $261 per custom design Customer service - $426 per customer Management would like an analysis of the profitability of a particular customer, Eagle Wings, which has ordered the following products over the last 12 months: Standard - Custom Number of gliders - 10 - 2 Number of orders -1 - 2 Number of custom designs - 0 - 2 Direct labor-hours per glider - 28.5 - 32 Selling price per glider - $1,650 - $2,300 Direct materials cost per glider - $462 - $576 The company's direct labor rate is $19 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Eagle Wings. Customer Margin(?):
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