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EXERCISE 7 5 Product and Customer Profitability Analysis O4 LO5 Updraft Systems Inc makes paragliders for sale through specialty sporting goods stores The company has a standard paraglider

EXERCISE 7–5 Product and Customer Profitability Analysis [LO4, LO5]

Updraft Systems, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Manage- ment has designed an activity-based costing system with the following activity cost pools and activity rates:

 

 

 

 

Management would like an analysis of the profitability of a particular customer, Eagle Wings, which has ordered the following products over the last 12 months:

 

 

 

 

The company’s direct labor rate is $19 per hour.

Required:

Using the company’s activity-based costing system, compute the customer margin of Eagle Wings.

Jun 29 2020 View more View Less

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