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 Activity Rate

Supporting direct labor $ $20$ per direct labor$-$hour

Order processing $ $196$ per order

Custom design processing $ $260$ per custom design

Customer service $ $432$ 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:

Standard Model Custom Design

Number of gliders $152$

Number of orders $12$

Number of custom designs $02$

Direct labor$-$hours per glider $27\mathrm{.}5032\mathrm{.}00$

Selling price per glider $ $1,825$ $ $2,420$

Direct materials cost per glider $ $466$ $ $570$

The company$$s direct labor rate is $$18$ 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.