Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom - designed

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 has designed an activity-based costing system with the following activity cost pools and activity rates:
Activity Cost Pool Activity Rate
Supporting direct labor $ 18 per direct labor-hour
Order processing $ 184 per order
Custom design processing $ 261 per custom design
Customer service $ 418 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:
Standard Model Custom Design
Number of gliders 142
Number of orders 12
Number of custom designs 02
Direct labor-hours per glider 28.5033.00
Selling price per glider $ 1,925 $ 2,400
Direct materials cost per glider $ 442 $ 570
The companys direct labor rate is $20 per hour.
Required:
Using the companys 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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

To compute the customer margin of Big Sky Outfitters using the activitybased costing system we need ... 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

Management Accounting

Authors: Will Seal, Carsten Rohde, Ray Garrison, Eric Noreen

6th Edition

0077185536, 978-0077185534

More Books

Students also viewed these Accounting questions

Question

=+b) Is MediaChips manufacturing process in control?

Answered: 1 week ago

Question

Calculate SE ( p ) for n=100 and the values of p given 16. p=.01

Answered: 1 week ago