Question: Calculate the customer margin Check Exercise 7-5 Product and Customer Profitability Analysis (L07-4, LO7-5] Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods
Calculate the customer margin
Check Exercise 7-5 Product and Customer Profitability Analysis (L07-4, LO7-5] 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: points eBook Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Activity Rate $ 22 per direct labor-hour $ 194 per order $ 252 per custom design $ 424 per customer References 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 16 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 27.50 33.00 $ 1,700 $ 2,360 $ 482 $ 570 The company's direct labor rate is $16 per hour
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