Question

Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designedparagliders. 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 $26 per direct labor-hour
Order processing $284 per order
Custom designing processing $186 per custom design
Customer service $379 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 12months:

Standard
Model Custom
Design
Number of gliders 20 3
Number of orders 1 3
Number of custom designs 0 3
Direct labor-hours per glider 26.35 28.00
Selling price per glider $1,850 $2,400
Direct materials cost per glider $564 $634

The company's direct labor rate is $19.50 per hour.


Required:
Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Round intermediate calculations and final answer to the nearestwhole number. Omit the "$" sign in your response.)

Answer 1

Revenue		44200	=(1850*20)+(2400*3)
Costs:
Direct materials	13182		=(564*20)+(634*3)
Direct labor	11915		=(26.35*20*19.5)+(28*3*19.5)
Supporting Direct labor	15886		=(26.35*20*26)+(28*3*26)
Order processing	1136		=(1*284)+(3*284)
Custom design processing	558		=(3*186)
Customer service	379
Total costs		43056
Customer margin		1144

Answer 2

Standard Custom Total

No. ofGliders20323
Sales Revenue 20x$1,850 $37,000
3x$2400$7,200$44,200
_______________________________
Direct materials20x$564 $11,280
3x$634$1,902 $13,182
Direct labor
26.35x$19.50x20 $10,277
28x$19.50x3$1,638 $11,915
Overheads
Supporting direct labor
26.35 x$26$685
28 x$26$728 $1,413
Order processing
1 x$284$284
3 x$284$852 $1,136
Custom design 3x$1860$558 $558
Customerservice$379
__________________________________
Total costs$22,526 $5,678 $28,583
Margin$15,617
___________________________________

Answer 3

top one is correct, jule is wrong