Compute the customer margin of big sky outfitters

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Hermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. 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 $ 18 per direct labor-hour Order processing $ 194 per order Custom designing processing $ 255 per custom design Customer service $ 428 per customer Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: Standard Model Custom Design Number of gliders 15 3 Number of orders 2 3 Number of custom designs 0 3 Direct labor-hours per glider 27.50 32.00 Selling price per glider $ 1,650 $ 2,350 Direct materials cost per glider $ 460 $ 582 The company’s direct labor rate is $16 per hour. Required: Using the company’s activity-based costing system, compute the customer margin of Big Sky Outfitters. (Do not round intermediate calculations.)

Reference no: EM131599856

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