Question: 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 $

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 $ 16 per direct labor-hour
Order processing $ 190 per order
Custom design processing $ 266 per custom design
Customer service $ 436 per customer

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

Standard Model Custom Design
Number of gliders 11 2
Number of orders 2 2
Number of custom designs 0 2
Direct labor-hours per glider 30.50 32.00
Selling price per glider $ 1,750 $ 2,360
Direct materials cost per glider $ 462 $ 584

The companys direct labor rate is $20 per hour.

Required:

Using the companys activity-based costing system, compute the customer margin of Hank Inc.. (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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