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5 Exercise 5-5 (Algo) Product and Customer Profitability Analysis [LO5-4, LO5-5] 16.66 points Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods
5 Exercise 5-5 (Algo) Product and Customer Profitability Analysis [LO5-4, LO5-5] 16.66 points Thermal Rising, Incorporated, 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: Skipped eBook Hint Activity Cost Pool Supporting direct labor Order processing Custom design processing. $ 16 Activity Rate per direct labor-hour $ 182 per order Customer service $ 253 per custom design $ 420 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: Print Number of gliders Number of orders Number of custom designs Direct labor-hours per glider References Selling price per glider Direct materials cost per glider Standard Model Custom Design 15 2 2 2 0 2 27.50 33.00 $ 1,825 $ 482 $ 2,410 $ 584 The company's direct labor rate is $22 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign. Customer margin
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