Compute the customer margin of big sky outfitters

Reference no: EM132079860

Question: 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	Activity Rate
Supporting direct labor	$20	per direct labor-hour
Order processing	$200	per order
Custom designing processing	$261	per custom design
Customer service	$434	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	10	3
Number of orders	1	3
Number of custom designs	0	3
Direct labor-hours per glider	27.50	31.00
Selling price per glider	$1,600	$2,370
Direct materials cost per glider	$462	$584

The company's direct labor rate is $20 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: EM132079860

Questions Cloud

What style of leadership adapts most to types of employees : Indicate and explain in writing what style of leadership adapts the most to the following types of employees, and why:

Evaluate the acquisition of a wind power plant : The plant's basic acquisition price is $100 million, and would cost another $20 million to modify it for special use by the firm.

Discuss the appropriateness of the journal entries : In each of the above situations, discuss the appropriateness of the journal entries in terms of generally accepted accounting principles

Stability of the model increases : As the size of the smoothing constant, a, increases:more weight is put on historic demand data.,more weight is put on recent demand data,the sensitivity

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.

Was there legal basis for confiscating the minnows : Explain the purpose of the Fourth Amendment. Was there a legal basis for confiscating the minnows? Explain.

Complete an income statement for each year : What is the projected net income and Operating Cash Flows (OCF) for the three years? Complete an income statement for each year.

What is the maximum profit this company could achieve : A clothing company produces pants and shirts. What is the maximum profit this company could achieve?

Do all assets require the same level of protection : How do you go about identifying an organization’s assets? Do all assets require the same level of protection?

User Account

All Pages