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Exercise 7-5 (Algo) Product and Customer Profitability Analysis (L07-4, LO7-5) 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, LO7-5) 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 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 $426 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 tandard Custom Model Design Number of gliders 15 2 Number of orders 1 Number of custon designs 0 2 Direct labor-hours per glider 29.50 33.00 Selling price per glider $ 1,850 $ 2,400 Direot materiale cont per glider $ 472 570 The company's direct labor rate is $18 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.) Customer margin
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