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6. Muscat Sports company makes shoes for sale through specialty sporting goods stores. The company has a standard shoe model and custom designed shoes. Management

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6. Muscat Sports company makes shoes for sale through specialty sporting goods stores. The company has a standard shoe model and custom designed shoes. Management has designed an activity based costing with the following activity cost pools and activity rates: Activity cost pool Activity Rate Supporting manufacturing 89 per direct labor hour Order processing $8 per order Custom designing $13 per custom design Customer service $2 per customer Management would like an analysis of the profitability of a particular customer, Khamis Footwear, which has ordered the following products over the last 12 months. Standard Customer Model Design Number of shoes 100 Number of orders 1 Number of custom designs 0 Direct labor-hours per shoe 4 Selling price per shoe $85 Direct Materials cost per shoe $3 20 3 20 10 $150 $7 The company's direct labor rate is $7 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Khamis footwear. (4marks)

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