Colby Company makes cases for cell phones of all sizes and types for sale through specialty retailers. The company makes a standard model for the most recent IPhone as well as a deluxe model. Management has designed an ABC system with the following activity cost pools and activity rates for these models: Activity Cost Pool Supporting manufacturing order processing Customer service Activity Rates $2 per direct labour-hour $21 per order $62 per customer Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products over the last 12 months: Standard Deluxe Model Model Number of cases Number of orders Direct labour-hours per case 210 65 5 0.25 2 0.40 Selling price per case $ 41 $ 61 Direct materials cost per case $ 18 $ 21 The company's direct labour rate is $22 per hour. Required: Using the company's ABC system, compute the customer margin of Cell City. Answer is complete but not entirely correct. Sales $ 12,575 ( Costs: Direct materials $ 7,430 Direct labour 1,265 Supporting manufacturing 115 Order processing 147 Customer service 62 9,019 Customer margin $ 3,556