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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.

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 $16 per direct labor hour
Order processing $196 per order
Custom design processing $255 per custom design
Customer Service $424 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 2
number of orders 2 2
number of custom designs 0 2
direct labor hours per glider 29.50 33.00
selling price per glider $1675 $2330
direct materials cost per glider $450 $576

The companies direct labor rate is $20 per hour.

Using the companies 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)

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