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Using the company's activity-based system, compute the customer margin of Big Sky Outfitters. Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores.
Using the company's activity-based system, compute the customer margin of Big Sky Outfitters.
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 followi 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 188 per order 267 per custom design $ 426 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 Custom Model Design Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider 10 2 26.50 32.00 $ 1,700 2,350 s 456 $ 584 The company's direct labor rate is $18 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.)Step by Step Solution
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