Direct labor rate: $ 21 per hour

Exercise 3D: Product and customer profitability analysis (Value: 10 points) LMN Excercise, Inc. manufactures portable infrared saunas. It markets and sells them to gyms and spas who in turn sell them to their individual clients. The company has a generic model but also makes models to customer specifications, especially for gyms. The cost actifities and their respective rates in the company's activity costing system are as follows: Cost Activity Activity Rate Design with customer specifications $287 per each design Order Procesing $211 per order Customer Service $470 per client Direct support labor $19.80 per-labor hour Management asked you for a profitability analysis for customer Z. You have been provided the following information regarding this customer's orders in the past 12 months. Generic model Number of Saunas Order quantity Number of designs with specification Direct labor for each sauna Sale price per sauna Cost of materials per sauna 10 2 0 31 hours $1,815 $508 Model with specifications 4 1 4 35 hours $2,530 $634 Required: Calculate the margin or profitability of customer Z