1A. Assume a company manufactures only two products14,000 units of Product A and 6,000 units of Product B. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products A and B:

Activity Cost Pool	Activity Measure	Estimated Overhead Cost			Expected Activity
Machining	Machine-hours	$	300,000		10,000	MH
Machine setups	Number of setups	$	150,000		200	Setups
Product design	Number of products	$	78,000		2	Products

Activity Measure	Product A	Product B
Machine-hours	9,000	6,000
Number of setups	50	150
Number of products	1	1

Using the ABC system, how much overhead cost would be assigned from the Machining cost pool to Product A?

1B. Assume a companys activity-based costing system includes three activities with the following activity rates:

Activity Cost Pool			Activity Rate
Travel		$	2	per mile driven
Deliveries		$	50	per delivery
Customer service		$	22	per phone call

Two of the companys many customers include Customer A and Customer B. These two customers consumed the companys activities as follows:

	Total Expected Activity
	Customer A				Customer B
Travel (number of miles driven)		300				250
Deliveries (number of deliveries)		15				5
Customer service (number of phone calls)		20				12

If the company earned $1,280 in revenue serving Customer B, then what is the customer margin for this customer?