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Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders.
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management 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 $ 16 per direct labor-hour $194 per order $ 255 per custom design $ 420 per customer Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which 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 The company's direct labor rate is $16 per hour. Standard Custom Design Model 11 3 2 3 D 3 29.50 32.00 $ 1,950 $ 2,450 $ 470 $ 574 Required: Using the company's activity-based 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. Customer margin
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Step 1 Calculate total Costs for Each Activity Supporting Direct Labor For Standard Model 11 glidersx2950 hoursglidersx16hour11 glidersx2950 hoursglid...Get Instant Access to Expert-Tailored Solutions
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