Reference no: EM131808659

Question - Thermal 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 $ 22 per direct labor-hour Order processing $ 182 per order Custom designing processing $ 268 per custom design Customer service $ 426 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 2 Number of orders 2 2 Number of custom designs 0 2 Direct labor-hours per glider 27.50 34.00 Selling price per glider $ 1,700 $ 2,350 Direct materials cost per glider $ 444 $ 570 The company's direct labor rate is $22 per hour.

Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters.