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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 Active Rate

Supporting Direct Labor $ 22 per direct labor-hour

Order processing $ 192 per order

Custom design processing $255 per custom design

Customer service $430 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 11 3

Number of orders 2 3

Number of custom designs 0 3

Direct labor-hours per glider $27.50 $33.00

Selling price per glider $1650 $2370

Direct materials cost per glider $448 $574

The company's direct labor rate is $16 per hour.

Question: Using the company's activity based costing system, compute the customer margin of Big Sky Outfitters:

Customer Margin: ???

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