Exercise 7-5 Product and Customer Profitability Analysis [L07-4, LO7-5] Thermal Rising, Inc., 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 Supporting direct labor Order processing Custom designing processing Activity Rate $ 20 per direct labor-hour $194 per order $ 253 per custom design $ 428 per customer Customer service 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 Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider 28.50 32.00 $ 1,650 $ 2,370 s 466 576 The company's direct labor rate is $20 per hour Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Do not round intermediate calculations.) Hints References eBook & Resources