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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

$

192

per order

Custom design processing

$

259

per custom design

Customer service

$

420

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

29.50

34.00

Selling price per glider

$

1,675

$

2,310

Direct materials cost per glider

$

442

$

576

The companys direct labor rate is $16 per hour.

Required:

a. What is the Total Revenue from the products ordered by the customer Big Sky Outfitters

b. What is the Total Direct Material Cost for the products ordered by the customer Big Sky Outfitters

c. What is the Total Direct Labor Cost for the products ordered by the customer Big Sky Outfitters

d. What is the total cost of products ordered by the customer Big Sky Outfitters

e. What is the Customer Margin for Big Sky Outfitters

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