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Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes customdesigned paragliders. Management
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes customdesigned 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 is 26 per direct labor-hour Order processing $1 284 per order Custom design processing S 186 per custom design Customer service 1; 3T9 per customer Management would like an analysis ofthe profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: Standard Custom Model Design Number of gliders 2D 3 Number of orders 1 3 Number of custom designs 9 3 Direct labor-hours per glider 26.35 28.69 Selling price per glider S 1,85@ :5 2,469 Direct materials cost per glider $ 564- $ 634 The company's direct labor rate is $19.50 per hour. Required: Using the company's activitybased costing system, compute the customer margin of Big Sky Outfitters. [Round your intermediate calculations and final answer tothe nearest whole dollar amount.)
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