jnelso67 Posts: 1, Reputation: 1 New Member   #1 Mar 23, 2011, 10:38 AM

I cannot figure out the answer for this customer margin. 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 $18 per direct labor-hour Order processing $198 per order Custom designing processing $266 per custom design Customer service $422 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 12 3 Number of orders 1 3 Number of custom designs 0 3 Direct labor-hours per glider 27.5 31 Selling price per glider $1,600 $2,390 Direct materials cost per glider $480 $582 -------------------------------------------------------------------------------- The company's direct labor rate is $18 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)

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