Exercise $7-5($Algo$)$ Product and Customer Profitability Analysis $[$LO$7-4,$ LO$7-5]$

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 designed an activity$-$based costing system with the following activity cost pools and activity rates:

$\backslash$table$[[$Activity Cost Pool,Activity Rate$],[$Supporting direct labor,$$18$ per direct labor$-$hour$],[$Order processing,$$194$ per order$],[$Custom design processing,$$265$ per custom design$],[$Customer service,$$436$ per customer$]]$

Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the following products over the last $12$ months:

$\backslash$table$[[$Number of gliders,$\backslash$table$[[$Standard$],[$Model$]],\backslash$table$[[$Custom$],[$Design$]]],[$Number of orders,$13,2],[$Number of custom designs,$1,2],[$Direct labor$-$hours per glider,$0,2],[$Selling price per glider,$26\mathrm{.}50,34\mathrm{.}00],[$Direct materials cost per glider,$$1,850,$$$2,420$