Exercise $7-5($Algo$)$ Product and Customer Profitability Analysis $[$LO$7-4,$ LO$7-5]$

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 designed an activity$-$based costing system with the following activity cost pools and activity rates:

$\backslash$table$[[$Activity Cost Pool,Activity Rate$],[$Supporting direct labor,$$20$ per direct labor$-$hour$],[$Order processing,$$186$ per order$],[$Custom design processing,$$266$ per custom design$],[$Customer service,$$420$ per customer$]]$

Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the following products over the last $12$ months:

$\backslash$table$[[,\backslash$table$[[$Standard$],[$Model$]],$Custom Design$],[$Number of gliders,$11,3],[$Number of orders,$2,3],[$Number of custom designs,$0,3],[$Direct labor$-$hours per glider,$29\mathrm{.}50,31\mathrm{.}00],[$Selling price per glider,$$1,850,$$$2,480$