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Exercise 5-5 (Algo) Product and Customer Profitability Analysis [LO5-4, LO5-5] Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company
Exercise 5-5 (Algo) Product and Customer Profitability Analysis [LO5-4, LO5-5] 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: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Activity Rate $ 18 per direct labor-hour: $198 per order $ 252 per custom design $ 424 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 nces Number of gliders Number of orders Number of custom designs Standard Model Custom Design 13 3 2 0 Direct labor-hours per glider Selling price per glider Direct materials cost per glider The company's direct labor rate is $20 per hour Required: 29.50 $1,925 32.00 $ 2,480 $ 464 $ 570 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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