1. Boeing and Airbus allocate their manufacturing overhead costs using activity-based costing. The following table summarizes the costs and cost drivers:

Activity	Boeing Total Cost ($)	Cost Driver	Cost Driver Quantity	Airbus Total Cost ($)
Setup	$1,200,000	Number of setups	1,200 setups	$1,000,000
Machining	$2,500,000	Machine hours	100,000 hours	$2,000,000
Quality Control	$1,500,000	Number of inspections	15,000 inspections	$1,200,000
Total	$5,200,000			$4,200,000

• Boeing produced 800 airplanes, and Airbus produced 900 airplanes during the year.
• Allocate manufacturing overhead costs per airplane for Boeing and Airbus using activity-based costing.
• Discuss how differences in setup costs impact Boeing's and Airbus's manufacturing efficiency and cost competitiveness.