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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
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 Rate Supporting direct labor s 18 per direct labor- Order processing Custom design processing $262 per custom design Customer service hour $192 per order $ 422 per customer Management would like an analysis of the profitability of a particular customer, Big Sky Outftters, which has ordered the following products over the last 12 months Standard Custom Model Design Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider pirect materials cost per 16 28.50 32.00 s 1,700 $2,360 460 s 572 glider The company's direct labor rate is $18 per hour Prey 4 of 4
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