Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

image text in transcribedimage text in transcribed

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 Supporting direct labor Order processing Custom design processing Customer service Activity Rate $ 18 per direct labor-hour $ 190 per order $ 266 per custom design $ 422 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 12 months Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider Standard Custom Model Design 11 2 2 2 0 2 28.50 32.00 $1,700 $2,360 $ 452 $ 576 The company's direct labor rate is $20 per hour Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Round your intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.) Customer margin Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Activity Rates Supporting direct labor $ 9 per direct labor-hour Machine processing $ 3 per machine-hour Machine setups Production orders Shipments Product sustaining $45 per setup $150 per order $ 115 per shipment $ 875 per product Activity data have been supplied for the following two products: Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Total Expected Activity X425 167 2001 2,000 1,050 2,400 50 40 7 7 14 2 88NNNN Product sustaining Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? Activity Cost Pool Supporting direct labor Machine processing K425 M67 Machine setups Production orders Shipments Product sustaining Total overhead cost $ 0 $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting Foundations and Evolutions

Authors: Michael R. Kinney, Cecily A. Raiborn

9th edition

9781285401072, 1111971722, 1285401077, 978-1111971724

More Books

Students also viewed these Accounting questions

Question

How are interfund transfers reported in fund financial statements?

Answered: 1 week ago

Question

What Are the Steps in the Selection Process?

Answered: 1 week ago

Question

A quick ratio much smaller than the current ratio reflects:

Answered: 1 week ago