1. Assume a companys activity-based costing system included three expenses: Vehicle operating expenses, $300,000; Vehicle depreciation, $140,000; and Customer service salaries, $210,000. These costs were consumed by four activities as follows:

	Travel	Deliveries	Customer Service	Other	Total
Vehicle operating expenses	45%	40%	10%	5%	100%
Vehicle depreciation	40%	50%	0%	10%	100%
Customer service salaries	20%	30%	35%	15%	100%

How much total cost (including all three expenses) would be allocated to the Travel activity?

A) $251,500

B) $221,500

C) $233,000

D) $203,000

2. 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	25,000	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 total overhead cost would be assigned from all of the activities to Product A?

A) $184,500

B) $164,500

C) $194,500

D) $174,500