Updraft Systems, Inc., makes paragliders for sale throughspecialty sporting goods stores. The company has a standardparaglider model, but also makes custom-designed paragliders.Management has designed an activity-based costing system with thefollowing activity cost pools and activity rates:
Activity CostPool Activity Rate Supporting directlabor $ 18 per direct labor-hour Orderprocessing $ 190 per order Customdesigning $ 265 per custom design Customerservice $ 422 per customer
Management would like an analysisof the profitability of a particular customer, Eagle Wings, whichhas ordered the following products over the last 12 months:
Standard
Model Custom
Design Number ofgliders 12 3 Number oforders 2 3 Number of customdesigns 0 3 Direct labor-hoursper glider 26.50 32 Selling price perglider $ 1,725 $ 2,370 Direct materialscost per glider $ 472 $ 568
The companyâs direct labor rateis $20 per hour.
Required: Using the companyâs activity-based costing system, compute thecustomer margin of Eagle Wings.(Leave no cells blank - becertain to enter "0" wherever required. Loss amount should beindicated with a minus sign. Do not round intermediatecalculations. Round your final answer to the nearest dollar amount.Omit the "$" sign in your response.)
Customer margin $
Updraft Systems, Inc., makes paragliders for sale throughspecialty sporting goods stores. The company has a standardparaglider model, but also makes custom-designed paragliders.Management has designed an activity-based costing system with thefollowing activity cost pools and activity rates: |
| Activity CostPool | Activity Rate | ||
| Supporting directlabor | $ | 18 | per direct labor-hour |
| Orderprocessing | $ | 190 | per order |
| Customdesigning | $ | 265 | per custom design |
| Customerservice | $ | 422 | per customer |
Management would like an analysisof the profitability of a particular customer, Eagle Wings, whichhas ordered the following products over the last 12 months: |
| Standard Model | Custom Design | |||
| Number ofgliders | 12 | 3 | ||
| Number oforders | 2 | 3 | ||
| Number of customdesigns | 0 | 3 | ||
| Direct labor-hoursper glider | 26.50 | 32 | ||
| Selling price perglider | $ | 1,725 | $ | 2,370 |
| Direct materialscost per glider | $ | 472 | $ | 568 |
| The companyâs direct labor rateis $20 per hour. |
| Required: |
Using the companyâs activity-based costing system, compute thecustomer margin of Eagle Wings.(Leave no cells blank - becertain to enter "0" wherever required. Loss amount should beindicated with a minus sign. Do not round intermediatecalculations. Round your final answer to the nearest dollar amount.Omit the "$" sign in your response.) |
| Customer margin | $ |
