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 Rate$],[$Activity Cost Pool,$$18$ per direct labor$-$hour$],[$Supporting direct labor,$$190$ per order$],[$order processing,$$257$ per custom design$],[$Custom design processing,$$416$ per customer$],[$Customer service,$]]$

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$]],\backslash$table$[[$Custom$],[$Design$]]],[$Number of gliders,$15,3],[$Number of orders,$1,3],[$Number of custom designs,$0,3],[$Direct labor$-$hours per glider,$28\mathrm{.}50,31\mathrm{.}00],[$Selling price per glider,$$1,875,$$$2,420$