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 designed an activitybased costing system with the following activity cost pools and activity rates:
tableActivity Cost Pool,Activity RateSupporting direct labor,$ per direct laborhour,order processing,$ per order,Custom design processing,$ per custom design,Customer service,$ per customer,
Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the following products ove the last months:
tabletableStandardModeltableCustomDesignNumber of gliders,Number of orders,Number of custom designs,Direct laborhours per glider,Selling price per glider,$$
