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Exercise 7-5 (Algo) Product and Customer Profitability Analysis (L07-4, L07-5) Thermal Rising, incorporated, makes paragliders for sale through specialty sporting goods stores. The company has
Exercise 7-5 (Algo) Product and Customer Profitability Analysis (L07-4, L07-5) 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 has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Control Mtivity Rate Supporting direct labor $ 18 per direct labor-hour Order processing $ 194 per order Custom design processo 5 256 per custom design Customer service 5432 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 Custom Model Design Number of gliders 15 Number of orders 2 Number of custom designe Direct labor-houre per glider 27.50 33.00 Selling price per glider 1,825 $ 2,480 Direct materials cost per slider $ 482 572 The company's direct labor rate is $16 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Round your intermediate calculations and final answer to the nearest whole dollar amount Loss amounts should be entered with a minus sign 3 Customer margin
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