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,$$18$ per direct labor$-$hour$],[$Order processing,$$184$ per order$],[$Custom design processing,$$262$ per custom design$],[$Customer service,$$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,$15,,2],[$Number of orders,$1,,2],[$Number of custom designs,$0,,2],[$Direct labor$-$hours per glider,$30\mathrm{.}50,,34\mathrm{.}00],[$Selling price per glider,$$1,850,$$$,2,500],[$Direct materials cost per glider,$$464,,$$$578$