gue vy EXERCISE 7-6 Product and Customar Profitability Analysis (LO7-4, LO7-5) ‘Thermal Rising, nc., makes paragliders forsale throug specialty sporting goods stores, The com- pany has a standard paraglider model, butalso makes custom-designed paragliders. Management has Sesigned an activty-busod costing system with the following activity cot pools and activity rats: ‘Aetvty Cost Pook ett Rate Supporting doctor. $26 per tet laborhour Order processing $284 per ordar usiom design processing $188 per custom design Customer sovice $8979 per customer Management would lke an analysis of the profitability ofa particular customer, Big Sky Outfit. tera, which has ordered the following products aver the las 12 months: Standard "Custom Mods! Design Number of giere 2 3 Number of orders. 22... 1 3 Numbor of custom designs 0 8 Direct labor-hours per ger 26352800 Seling price par ger 81,850. $2,400 Direct mateais cost per ger $504 ged ‘The company’s ivct abor ite is $19.50 pec hou. Required: Using the company’s activity-based costing system, compute the customer margin of Big Sky Outfitters