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 paragilder 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,$ $184$ per order$],[$Custom design processing,$ $268$ per custom design$],[$Customer service,$ $424$ 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 D$,$Design$],[$Number of gliders,,$16,,3],[$Number of orders,,$2,,3],[$Number of custom designs,,$,,3],[$Direct labor$-$hours per glider,,$29\mathrm{.}50,,31\mathrm{.}00],[$selling price per glider,,$ $1,900,$$$2,2,450],[,,$$$454,,$$$578$