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 Activity Rates

Supporting manufacturing $ 2 per direct labour-hour

order processing $29per order

Customer service $70per 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 Model Deluxe Model

Number of cases 290 105

Number of orders 5 2

Direct labor-hours per case 0.25 0.40

Selling price per case$49 $69

Direct materials cost per case$26 $29

The companys direct labor rate is $30 per hour.

Required: Using the companys ABC system, compute the customer margin of Cell City.

sales

costs -

direct labor

direct material

supporting manufacturing

order processing

customer service

customer margin

show work and answer ASAP