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Exercise 6-5 Product and Customer Profitability Analysis [LO6-4, LO6-5] Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a
Exercise 6-5 Product and Customer Profitability Analysis [LO6-4, LO6-5] Thermal Rising, Inc., 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 S 22 per direct labor-hour S 198 per order S 261 per custom design S 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: Standard Model 15 Custom Design Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider $ $ 27.50 1,650 458 $ $ 34.00 2.310 580 The company's direct labor rate is $18 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Do not round intermediate calculations. Round your final answer to the nearest dollar.) Customer margin
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