Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13). The manufacturing cost of each unit is calculated using activity-based costing; using the following manufacturing cost pools.

Cost Pools Allocations base Costing rate

1- Materials handling Number of parts 2.40 per part

2- Manufacturing Supervision Hours of machine time 14.80 per hour

3- Assembly Number of parts 3.30 per part

4- Machine setup Each setup 56.50 per setup

5- Inspection and testing Logged hours 45.50 per hour

6- Packaging Logged hours 19.50 per hour

LCI currently sells the B-13 model for $1,690 and the F-32 model for $922. Manufacturing costs and activity usage for the two products are as follows:

B-13 F-32

Direct materials $150.50 $95.90

Number of parts 180.00 110.00

Machine Hours 7.50 6.20

Inspection time 1.50 1.25

Packaging time .75 .50

Set-ups 3.00 2.00

1) The product cost for model B-13 is calculated to be:

2) The product cost for model F-32 is calculated to be:

3) The product margin for model B-13 is calculated to be:

4) The product margin for model F-32 is calculated to be: