PWC Systems Inc. makes personal watercraft for sale through specialty sporting goods stores. The company has a standard model but also makes custom-designed models. Management has designed an ABC system with the following activity cost pools and activity rates:

Activity Cost Pool Activity Rates

Supporting manufacturing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22 per direct labour-hour

Order processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $212 per order

Custom design processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $243 per custom design

Customer service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $307 per customer

Management would like an analysis of the profitability of a particular customer, WaveRider, which has ordered the following products over the last 12 months:

The company€™s direct labour rate is $24 per hour.
Required:
Using the company€™s ABC system, compute the customer margin of WaveRider.

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Standard Model Custom Design Number of watercraft... Number of orders.... Number of custom designs.... Direct labour-hours per watercraft. Selling price per watercraft... Direct materials cost per watercraft.... 16 2 3 3 3 28.0 $13,200 $ 9,240 ....... 24.5 .... $10,600 $ 7,950