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Q-9: Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders.
Q-9: Thermal 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 Rates Supporting direct labour $26 per direct labour hour Customer service $379 per customer Order processing $284 per order Custom desigh processing $186 per custom design 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 Model Custom design No. of gliders 20 3 No of orders 1 3 No. of custom designs 0 3 Direct labour hours per item 26.35 28.00 Selling price per unit $1850 $2.400 Direct material cost per glider $564 $634 The company's direct labour rate is $19.50 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Thermal Rising End of the exam DSAC 3008 Test 1 - Fal 2020 page
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