Compute the customer margin of big sky outfitters

Assignment Help Financial Management
Reference no: EM131599856

Hermal 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 Activity Rate Supporting direct labor $ 18 per direct labor-hour Order processing $ 194 per order Custom designing processing $ 255 per custom design Customer service $ 428 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 15 3 Number of orders 2 3 Number of custom designs 0 3 Direct labor-hours per glider 27.50 32.00 Selling price per glider $ 1,650 $ 2,350 Direct materials cost per glider $ 460 $ 582 The company’s direct labor rate is $16 per hour. Required: Using the company’s activity-based costing system, compute the customer margin of Big Sky Outfitters. (Do not round intermediate calculations.)

Reference no: EM131599856

Questions Cloud

Current price of the bonds if the present yield to maturity : Compute the current price of the bonds if the present yield to maturity is:
What is present value of investment : You are considering investing in security that will pay you ?$2,000 in 31 years. If appropriate discount rate is 8%?, what is present value of investment?
What is this company credit score : What is this company's credit score (z-score)?
Arbitrageurs could take advantage of mispricing : If currency futures contract is priced below price implied by Covered Interest Parity, arbitrageurs could take advantage of mispricing by simultaneously
Compute the customer margin of big sky outfitters : Using the company’s activity-based costing system, compute the customer margin of Big Sky Outfitters.
What is the overall equipment effectiveness of the machine : A machine is available 12 hours a day. Each part takes 79 minutes to fabricate and 14 minutes to setup. What is the overall equipment effectiveness of machine?
Bid and ask quotes for the euro and canadian dollar : Bid and Ask quotes for the Euro (EUR) and Canadian Dollar (CAD) are given below:
The projected cash flows for the investment : Create a table showing the projected cash flows for the investment, assuming the next rental payment occurs one month from today.
An individual invests in mutual fund : An individual invests in a mutual fund that tracks the S&P500. how much money would he/she have to save per month to have a million dollars by retirement?

Reviews

Write a Review

Financial Management Questions & Answers

  Decided to invest in an upgraded potato slicing machine

Kelly owns a potato chip manufacturing business. Since the demand for her gourmet potato chips is on the rise, Kelly has decided to invest in an upgraded potato slicing machine that will slice potatoes four times as fast as her previous machine. The ..

  The firm uses no external financing sources

A firm wishes to maintain an internal growth rate of 9.25 percent and a dividend payout ratio of 41 percent. The current profit margin is 6.3 percent and the firm uses no external financing sources. What must total asset turnover be?

  The firm net income-total dollar return to investors

Your firm, General Hospital currently uses zero debt financing. Its operating income (EBIT) is $1 million and it pays taxes at a 40 percent rate. It has $5 million in assets and, because it is all-equity financed, $5 million in equity. What impact wo..

  What must total asset turnover be

A firm wishes to maintain an internal growth rate of 8.3 percent and a dividend payout ratio of 40 percent. What must total asset turnover be?

  What is the maximum initial cost the company

Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.76 million at the end of the first year, and these savings will grow at a rate of 3 percent per year indefinitely. What is the maximum initial cost the co..

  About the asset liquidity of apple relative to? dell

In April? 2013, Dell had a quick ratio of 1.13 and a current ratio of 1.19. What can you say about the asset liquidity of Apple relative to? Dell? ?

  Freddiemac reports that the average rate

FreddieMac reports that the average rate on a 30-year fixed rate mortgage is 3.92% as of January 2012. This is down from 4.76% in January 2011 and 5.03% in January 2010. If you have a $230,000, 5%, 30-year mortgage, how much interest will you save if..

  What is the equivalent annual annuity if the discount rate

Machinery costs $1 million today and $100,000 per year to operate. It lasts for 8 years. What is the equivalent annual annuity if the discount rate is 5%? Enter your answer in dollars and round to the cent.

  What rate of return in order to achieve this goal

Franklin Templeton has just invested $9,260 for his son (age one). This money will be used for his son’s education 18 years from now. He calculates that he will need $71,231 by the time the boy goes to school. what rate of return will mr. templeton n..

  Predicting future returns using past data

Predicting future returns using past data ______.

  What will be the value of this investment

if a nurs deposits $24,000 today in mutual fund that is expected to grow at an annual rate of 8%, what will be the value of this investment:

  Weaknesses of capital investment evaluation methods

Using information from your text and at least one scholarly source, compare strengths and weaknesses of capital investment evaluation methods.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd