Green Tide Ltd. makes custom-designed kayaks that they sell through retail sporting goods stores. Management has designed an activity-based costing system with the following activity pools and activity rates:

Supporting direct labor:	$15	per dlh
Order processing:	$30	per order
Custom design processing:	$54	per custom design

Management would like an analysis of the profitability of a particular customer, MidLand Outfitters, which has ordered the following in the last twelve months:

Kayaks purchased:	45
Orders placed:	4
Number of custom designs:	9
Direct labor hours to produce each kayak:	15
Selling price per kayak:	$585
Direct materials cost per kayak:	$97

The companys wage rate is $15 per hour.

Using the companys activity-based costing system, compute the customer margin for MidLand Outfitters.

Multiple Choice

• $20,454

• $1,104

• $10,731

• $15,594