thermal rising inc makes paragliders for sale thermal rising inc makes paraglide

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thermal rising inc makes paragliders for sale thermal rising inc makes paragliders for sale thermal rising inc makes paragliders for sale ×1+ Quiz 1 (Chap 2, 3, 4 and Question 15 (of 20) 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 Rate $ 18 per direct labor-hour $ 182 per order $ 256 per custom design $ 428 per customer Activity Cost Pool Supporting direct labor Order processing Custom designing processing Customer service Management would like an analysis of the proftability of a particular customer, Big Sky Outiters, which has ordered the following products over the last 12 months: Standard Custom Model Design 12 Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider 29.50 31.00 s 1,700 $2,370 $ 472 582 The company's direct labor rate is $20 per hour Required: Usina the companvs activitv-base Ese

Explanation / Answer

Customer margin: $ 1008 STANDARD CUSTOM TOTAL Number of Gilders 12 3 15 Number of orders 2 3 5 Number of custom design 0 3 3 Direct labour hour per glider 29.5 31 Total direct labour hours 354 93 447 Sales revenues 20400 7110 27510 Less: Cost Material 5664 1746 7410 Labour 7080 1860 8940 Overheads assigned Supporting labour (@ 18 per DLH) 6372 1674 8046 Order processing (@ 182 per order) 364 546 910 Design processing (@256 per design) 0 768 768 Customer service (@ 428 per customer) 0 0 428 Customer margin 920 516 1008

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