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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

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

Activity Rate

Supporting direct labor

$

18

per direct labor-hour

Order processing

$

200

per order

Custom design processing

$

254

per custom design

Customer service

$

434

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 Model

Custom Design

Number of gliders

15

2

Number of orders

1

2

Number of custom designs

0

2

Direct labor-hours per glider

29.50

32.00

Selling price per glider

$

1,600

$

2,340

Direct materials cost per glider

$

466

$

580

The companys direct labor rate is $20 per hour.

Required:

Using the companys 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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