3 Thermal Rising, Inc., makes paragliders for sale through specialty sporting go

Question

3 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 points Activity Rate 20 per direct labor-hour 182 per order 269 per custom design 426 per customer eBook 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: Hint 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 Print 14 28.50 33.00 $1,675 $2,320 $ 478 582 References 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.)

Explanation / Answer

Sales 28090 =(14*1675)+(2*2320) Costs: Direct materials 7856 =(14*478)+(2*582) Direct labor 8370 =(14*28.5*18)+(2*33*18) Supporting Direct labor 9300 =(14*28.5*20)+(2*33*20) Order processing 728 =(2*182)+(2*182) Custom design processing 538 =269*2 Customer service 426 27218 Customer margin 872

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