Updraft Systems, Inc., makes paragliders for sale through specialty sporting goods stores. The comp

Updraft Systems, 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 manufacturing $18 per direct labor-hour Order processing $184 per order Custom designing $255 per custom design Customer service $426 per customer ————————————– Management would like an analysis of the profitability of a particular customer, Eagle Wings, which has ordered the following products over the last 12 months: Standard Model : Custom Design Number of gliders 13 : 3 Number of orders 2 : 3 Number of custom designs 0 : 3 Direct labor-hours per glider 29.50 : 32 Selling price per glider $1,725 : $2,350 Direct materials cost per glider $478 : $576 ————————————– The company’s direct labor rate is $18 per hour. Using the company’s activity-based costing system, compute the customer margin of Eagle Wings.

 

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