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 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 12 months:

Standard Model Design Custom Model
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.

Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters.

$1,144

Explanation:

According to the scenario, computation of the given data are as follow:-

Particular  Amount ($)

Sales44,200

Less-Direct material cost of grinder13,182

Less-Direct labor cost11,915

Less-Supporting direct labor15,886

Less- Order processing1,136

Less-customer service379

Less- Custom designing558

Margin of customer of big sky outfitters1,144

Working notes

1 . Sales = Selling Price Per Grinder × No. of Grinder

= $1,850 × 20 + $2,400  × 3

= $37,000 + $7,200

= $44,200

Direct Material Cost of Grinder = Selling Price Per Grinder × No. of Grinder

= $564 × 20 + $634 × 3

= $11,280 + $1,902

= $13,182

Direct Labor Cost = No. of Grinder × Direct Labor Hour - Per Grinder × Direct Labor Rate

= 20 × 26.35 × $19.50 + 3 × 28 × $19.50

= $10,276.5 + $1,638

= $11,914.5

Supporting Direct Labor = No. of Grinder × Direct Labor Hour-Per Grinder × Supporting Direct Labor Per Direct Labor-Hour

=20 × 26.35  × $26 + 3 × 28 × $26

= $13,702 + $2,184

= $15,886

Order Processing = Total No. of Order × Order Processing Per Order

= ( 1+3)  × $284

= 4 × $284

= $1,136

Custom Designing = Total No. of Custom Designing × Price Per Custom Designing

=(0+3) × $186

= $558

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.

answer; institution;