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 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 Activity Rate $22 per direct labor-hour $198 per order $262 per custom design $424 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $22 per hour. Customer margin Standard Model 18 28.50 $1.875 $456 Custom Design 32.28 2,430 Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters Note: Round your Intermediate calculations and finel answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.

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 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 Activity Rate $22 per direct labor-hour $198 per order $262 per custom design $424 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $22 per hour. Customer margin Standard Model 18 28.50 $1.875 $456 Custom Design 32.28 2,430 Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters Note: Round your Intermediate calculations and finel answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 8CE: Electan Company produces two types of printers. The company uses ABC, and all activity drivers are...

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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: Required:Using the company’s activity-based costing 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 following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service 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. Activity Rate $ 18 per direct labor-hour $184 per order $267 per custom design $426 per customer Standard Custom Model Design Customer margin The company's direct labor rate is $16 per hour. 15 2 0 3 3 3 33.00 29.50 $1,625 $2,370 $ 462 $ 570 Required: Using the company's activity-based…
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 Number of gliders Number of orders 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 custom designs Direct labor-hours per glider Activity Rate $20 per direct labor-hour $ 186 per order $ 263 per custom design $ 422 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $16 per hour. Customer margin Standard Model 13 1 0 28.50 $ 1,875 $ 464 Custom Design 3 3 3 32.00 $ 2,440 $ 584 Required: Using the company's activity-based…
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 Supporting direct labor Order processing Custom design processing Customer service 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 Activity Rate $20 per direct labor-hour $186 per order $262 per custom design $426 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $18 per hour. Customer margin Standard Model 12 1 0 28.50 $ 1,850 $ 464 Custom Design 3 3 3 34.00 $ 2,500 $ 580 Required: Using the company's…
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 Supporting direct labor Order processing Custom design processing Customer service 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 Activity Rate $18 per direct labor-hour $ 192 per order $ 256 per custom design $432 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $22 per hour. Customer margin Standard Model 12 2 0 28.50 $ 1,800 $456 Custom Design 3 3 3 32.00 $ 2,480 $ 576 Required: Using the company's…
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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. 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 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 Activity Rate $26 per direct labor-hour $ 284 per order $ 186 per custom design $ 379 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $19.50 per hour. Customer margin I Standard Model 20 1 0 26.35 $ 1,850 $ 564 Custom Design 3 3 3 Required: Using the company's activity-based…
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 Coat Pool Supporting direct labor Order processing Custom design processing Customer service 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-houra per glider Activity Rate $ 20 per direct labor-hour $ 198 per order $267 per custom design $ 420 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $20 per hour. Customer margin Standard Model 14 2 0 27.50 $1,875 $ 472 Custom Design 2 2 2 34.00 $ 2,490 $586 Required: Using the company's…
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 Supporting direct labor Order processing Custom design processing Customer service Number of gliders Number of orders Activity Rate $16 per direct labor-hour 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: $ 198 per order. $260 per custom design $ 422 per customer 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 $18 per hour. Customer margin Standard Model 16 1 0 27.50 $ 1,925 $452 Custom Design 2 2 2 32.00 $ 2,490 $582 Required: Using the company's…
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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. Management designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Activity Rate $ 18 per direct labor-hour $ 186 per order Custom design processing Customer service $ 270 per custom design $ 418 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 Standard Custom Model Design 11 2 1 2 0 2 28.50 $ 1,900 32.00 $ 2,420 $ 480 $ 576 The company's direct labor rate is $22 per hour. Required: Using the company's activity-based costing system,…