Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has...
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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 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 $ 196 per order Custom design processing $ 262 per custom design Customer service $ 426 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 13 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 $ 1,650 $ 2,310 Direct materials cost per glider $ 454 $ 566 The companys direct labor rate is $18 per hour. Required: Using the companys 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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