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Exercise 5 - 5 ( Algo ) Product and Customer Profitability Analysis [ LO 5 - 4 , LO 5 - 5 ] Thermal Rising,
Exercise Algo Product and Customer Profitability Analysis LO LO Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes customdesigned paragliders. Management has designed an activitybased 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 $ per direct laborhour $ per order $ per custom design $ 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 months: The company's direct labor rate is $ per hour. Required: Using the company's activitybased costing system, compute the customer margin of Big Sky Outfitters. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign. Answer is complete but not entirely correct.
Exercise Algo Product and Customer Profitability Analysis LO LO
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard
paraglider model, but also makes customdesigned paragliders. Management has designed an activitybased 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
$ per direct laborhour
$ per order
$ per custom design
$ 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 months:
The company's direct labor rate is $ per hour.
Required:
Using the company's activitybased costing system, compute the customer margin of Big Sky Outfitters.
Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered
with a minus sign.
Answer is complete but not entirely correct.
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