Our company manufactures and sells small and medium-sized jet aircraft. We currently make and sell two models:

RA100 is a medium-sized jet with a maximum capacity of 100 passengers. RA100 is primarily sold to airlines. We plan to sell 250 of the RA100 jets per year.

RA25 is a small jet that can carry at most 25 passengers. RA25 is primarily sold as an executive jet to corporations and charter companies. We plan to sell 75 RA25 jets per year.

Much of the manufacturing is outsourced to various suppliers. The components arrive at our production facility, where jets are assembled and tested prior to delivery to clients. We use normal absorption costing; overhead (OH) costs are allocated using machine hours (MHs). Estimated 2017 unit margins are below:

	RA 100	RA 25
Sales Price	$18,100,000	$9,900,000
unit costs:
DM	-5,520,000	-3,790,000
DL	-680,000	-430,000
Allocated OH	-10,130,000	-2,710,000
Unit Margin	$1,770,000	$2,970,000

We are investigating switching to an activity-based-costing (ABC) system. We have found that, if we do make the switch to ABC, the unit margin of RA100 will increase by $1,370,000. What will be the 2017 estimated unit margin of RA25 with the ABC system?

Please help. I know the answer is approximately negative 1596,667 but I don't get why since the RA100 increases by 1.37 million, that decreases RA25. Why is that? Please give details. I have the answer key but need further explanation.