newconnect mheducation.com xercises Hela Thermal Rising. Inc, makes paragliders

Question

newconnect mheducation.com xercises Hela Thermal Rising. Inc, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider actlivity cost pools and activity rates: otesrogiders Magment has designed an aciity-bsed costing system with the folowing Activity Cost Pool Activity Rate Suppozeing direct labor Order processing custos design processing s 20 per direct labor-hour s 196 per order 8 258 per custom design S .20 per cuateter 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 Custom Number of giiders Sunber of euston designs Direot labor-hours per giider Selling price per giidere Direet materials cost per glider448 568 28.50 32.00 $1,650 2,300 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 Siky 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

Customer Mrgin: $ 370

Explanation is as follows:

STANDARD CUSTOM TOTAL Sales units 16 3 19 Number of orders 1 3 4 Number of custom design 0 3 3 Number of DLH per unit 28.5 32 Total DLH (Number of sales units*DLH per unit) 456 96 552 labour rate per hour 20 20 20 Material cost per unit 448 568 Selling price per unit 1650 2300 Sales revenue 26400 6900 33300 Less: Cost Material 7168 1704 8872 labour cost 9120 1920 11040 Overheads assigned Supporting (@ 20 per DLH) 9120 1920 11040 Oorder ($ 196 per order) 196 588 784 Custom design (@$258) 0 774 774 Customer Service (@ 420 per customer) 0 0 420 Customer margin 370

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