its cost and management

Exercise 7-7 Product and Customer Profitability Analysis (LO3, LO4] mits 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 $11 per order Customer service $77 per customer eBook Print eferences 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: Number of cases Number of orders Direct labour-hours per case Selling price per case Direct materials cost per case Standard Model 110 $ 5 $ 0.25 $ 31 $ Deluxe Model SN 15 Sk 2 $8.40 51 5 11 The company's direct labour rate is $12 per hour