Question
Updraft Systems, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management
Updraft Systems, 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 | $ | 18 | per direct labor-hour |
Order processing | $ | 190 | per order |
Custom designing | $ | 265 | per custom design |
Customer service | $ | 422 | per customer |
Management would like an analysis of the profitability of a particular customer, Eagle Wings, which has ordered the following products over the last 12 months: |
Standard Model | Custom Design | |||
Number of gliders | 12 | 3 | ||
Number of orders | 2 | 3 | ||
Number of custom designs | 0 | 3 | ||
Direct labor-hours per glider | 26.50 | 32 | ||
Selling price per glider | $ | 1,725 | $ | 2,370 |
Direct materials cost per glider | $ | 472 | $ | 568 |
The companys direct labor rate is $20 per hour. |
Required: |
Using the companys activity-based costing system, compute the customer margin of Eagle Wings.(Leave no cells blank - be certain to enter "0" wherever required. Loss amount should be indicated with a minus sign. Do not round intermediate calculations. Round your final answer to the nearest dollar amount. Omit the "$" sign in your response.) |
Customer margin | $ |
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