mermal Rising. Incorporated, makes paragliders for sale through specialty sporting goods stores. The compan raglider model, but also makes custom-designed paragliders. Management has designed an activity-based c llowing 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 $ 20 per direct labor-hour $ 190 per order Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ord- roducts over the last 12 months: Number of custom designs Direct labor-hours per glider $ 256 per custom design $430 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $20 per hour. Standard Model 14 2 0 26.50 $ 1,925 $ 456 Custom Design 3 3 3 34.00 $2,450 $ 576 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

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Chapter1: Financial Statements And Business Decisions
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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
$20 per direct labor-hour
$190 per order
$ 256 per custom design
$430 per customer
Selling price per glider
Direct materials cost per gliden
The company's direct labor rate is $20 per hour.
Customer margin
Standard
Model
14
2
0
26.50
$ 1,925
$456
Custom Design
3
3
3
34.00
$2,450
$ 576
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.
Transcribed Image Text: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 $190 per order $ 256 per custom design $430 per customer Selling price per glider Direct materials cost per gliden The company's direct labor rate is $20 per hour. Customer margin Standard Model 14 2 0 26.50 $ 1,925 $456 Custom Design 3 3 3 34.00 $2,450 $ 576 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.
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