Pro Golf Corporation produces private label golf clubs for pro shops throughout North America. The company uses activity-based costing to evaluate the profitability of serving its customers. This analysis is based on categorizing the company’s costs as follows, using the ease of adjustment color coding scheme.

Pro Golf Corporation produces private label golf clubs for pro shops throughout North America. The company uses activity-based costing to evaluate the profitability of serving its customers. This analysis is based on categorizing the company’s costs as follows, using the ease of adjustment color coding scheme.

   

	Ease of Adjustment Code
Direct materials	Green
Direct labor	Yellow
Indirect labor	Yellow
Factory equipment depreciation	Red
Factory administration	Red
Selling and administrative wages and salaries	Red
Selling and administrative depreciation	Red
Marketing expenses	Yellow

   

Management would like to evaluate the profitability of a particular customer—the Peregrine Golf Club of Eagle, Colorado. Over the last 12 months this customer submitted 2 order for 90 golf clubs that had to be produced in 2 batches due to differences in product labeling requested by the customer. Summary data concerning the order appear below:

   

Number of clubs		90
Number of orders		2
Number of batches		2
Direct labor-hours per club		.30
Selling price per club	$	52.00
Direct materials cost per club	$	24.60
Direct labor rate per hour	$	22.00

   

A cost analyst working in the controller's office at the company has already produced the action analysis cost matrix for the Peregrine Golf Club that follows:

   

Action Analysis Cost Matrix for Peregrine Golf Club
	Activity Cost Pools
	Volume		Batch Processing		Order Processing		Customer Service		Total
Activity	27.00 direct labor-hours		2 batches		2 order		1 customer
Manufacturing overhead:
Indirect labor	$	34.00	$	51.80	$	5.00	$	0.00	$	90.80
Factory equipment depreciation		103.20		.70		0.00		0.00		103.90
Factory administration		15.40		.60		12.00		221.00		249.00
Selling and administrative overhead:
Wages and salaries		13.00		0.00		35.00		388.00		436.00
Depreciation		0.00		0.00		4.00		20.00		24.00
Marketing expenses		116.40		0.00		60.00		372.00		548.40
Total	$	282.00	$	53.10	$	116.00	$	1,001.00	$	1,452.10

   

Required:

Prepare an action analysis report showing the profitability of the Peregrine Golf Club. Include direct materials and direct labor costs in the report. (Round your answers to 2 decimal places. Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

   

Peregrine Golf Club
Sales		$
Green costs:
Direct materials	$
Green margin
Yellow costs:
Direct labor
Indirect labor
Marketing expenses
Yellow margin
Red costs:
Factory equipment depreciation
Factory administration
Selling and administrative wages and salaries
Selling and administrative depreciation
Red margin		$

Explanation:

Sales = 90 clubs × $52.00 per club = $4,680.00

Direct materials = 90 clubs × $24.60 per club = $2,214.00

Direct labor = 90 clubs × .30 hour per club × $22.00 per hour = $594.00