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 PoolActivity Rates Supporting manufacturing$2per direct labour-hour Order processing$19per order Customer service$60per 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 ModelDeluxe Model Number of cases 190 55 Number of orders 5 2 Direct labour-hours per case 0.25 0.40 Selling price per case$39 $59 Direct materials cost per case$16 $19

The companys direct labour rate is $20 per hour.

Required:

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