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 activitybased costing system with the following activity cost pools and activity rates:
Activity Cost Pool Activity Rate
Supporting direct labor $ per direct laborhour
Order processing $ per order
Custom design processing $ per custom design
Customer service $ 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 months:
Standard Model Custom Design
Number of gliders
Number of orders
Number of custom designs
Direct laborhours per glider
Selling price per glider $ $
Direct materials cost per glider $ $
The companys direct labor rate is $ per hour.
Required:
Using the companys activitybased 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.
