Question

Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Activity Rate $ 20 per direct labor-hour $ 186 per order $ 269 per custom design $ 422 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 Custom Model Design 15 2 Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider 28.50 32.00 $ 1,700 $2,310 $ 444 $ 566 The company's direct labor rate is $22 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.) Customer margin

Answer 1

Revenue		30120	=(1700*15)+(2310*2)
Costs:
Direct materials	7792		=(444*15)+(566*2)
Direct labor	10813		=(28.5*22*15)+(32*22*2)
Supporting Direct labor	9830		=(28.5*20*15)+(32*20*2)
Order processing	744		=(2*186)+(2*186)
Custom design processing	538		=(2*269)
Customer service	422
Total costs		30139
Customer margin		-19