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Sky Drivers Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom - designed
Sky Drivers Inc., 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 PoolActivity RateSupporting direct labor$ per direct laborhourOrder processing$ per orderCustom design processing$ per custom designCustomer service$ per customerManagement would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last months:Standard ModelCustom DesignNumber of glidersNumber of ordersNumber of custom designsDirect laborhours per gliderSelling price per glider$ Direct materials cost per glider$$ $ The company's direct labor rate is $ per hour.Required:Using the company's activitybased costing system, compute the customer margin of Big SkyOutfitters.
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