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Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has...

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Accounting

Thermal Rising, Incorporated, 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 $ 253 per custom design
Customer service $ 418 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 12 2
Number of orders 1 2
Number of custom designs 0 2
Direct labor-hours per glider 29.50 32.00
Selling price per glider $ 1,925 $ 2,400
Direct materials cost per glider $ 446 $ 566

The companys direct labor rate is $20 per hour.

Required:

Using the companys activity-based costing system, compute the customer margin of Big Sky Outfitters.

Note: 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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