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:

$```$

Activity Cost Pool

Supporting direct labor Activity Rate

Order processing $ $ per direct labor$-$hour

Custom design processing $ $194$ per order

Customer service $ $ $267$ per custom design

$ $420$ 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:

The company's direct labor rate is $\backslash (\backslash$$ $18\backslash )$ per hour.

Required:

Using the company's 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.

Customer margin