91) In its first year of operations a company produced and sold 70,000 units of Product A at a selling price of $20 per unit and 17,500 units of Product B at a selling price of $40 per unit. Additional information relating to the companys only two products is shown below:

	Product A				Product B				Total
Direct materials	$	436,300			$	249,200			$	685,500
Direct labor	$	200,000			$	104,000				304,000
Manufacturing overhead										608,000
Cost of goods sold									$	1,597,500

The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows:

						Activity
Activity Cost Pool (and Activity Measure)	Manufacturing Overhead						Product A			Product B			Total
Machining (machine-hours)		$	213,500				90,000			62,500			152,500
Setups (setup hours)			157,500				75			300			375
Product design (number of products)			120,000				1			1			2
Other (organization-sustaining costs)			117,000				NA			NA			NA
Total manufacturing overhead cost		$	608,000

The companys ABC implementation team also concluded that $50,000 and $100,000 of the companys advertising expenses could be directly traced to Product A and Product B, respectively. The remainder of its selling and administrative expenses ($400,000) was organization-sustaining in nature. If the company uses a traditional cost system that relies on plantwide overhead allocation based on direct labor dollars, what is the total gross margin (or product margin) earned by Product B?

92) In its first year of operations a company produced and sold 70,000 units of Product A at a selling price of $20 per unit and 17,500 units of Product B at a selling price of $40 per unit. Additional information relating to the companys only two products is shown below:

	Product A				Product B				Total
Direct materials	$	436,300			$	251,700			$	688,000
Direct labor	$	200,000			$	104,000				304,000
Manufacturing overhead										608,000
Cost of goods sold									$	1,600,000

The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows:

						Activity
Activity Cost Pool (and Activity Measure)	Manufacturing Overhead						Product A			Product B			Total
Machining (machine-hours)		$	213,500				80,900			71,600			152,500
Setups (setup hours)			157,500				75			300			375
Product design (number of products)			120,000				1			1			2
Other (organization-sustaining costs)			117,000				NA			NA			NA
Total manufacturing overhead cost		$	608,000

The companys ABC implementation team also concluded that $50,000 and $100,000 of the companys advertising expenses could be directly traced to Product A and Product B, respectively. The remainder of its selling and administrative expenses ($400,000) was organization-sustaining in nature. The companys activity-based costing system would allocate how much manufacturing overhead to Product A?