The next three questions are based on the following information: Alrex company is using an activity-based costing (ABC) system. The company produces and sells two products: Basic and Pro. The company consists of two departments: Production (where all manufacturing activities are taken) and Marketing (which engages in selling and admin activity only). The ABC system includes in unit product costs all costs easily associated with units. In addition, in the ABC system, there are four major indirect activities: Machine Setups, Special Processing. Factory Supervision, and Customer Relation. The prices, direct material cost (DM), shipping cost and direct labor-hours (DLHS) are given below for one unit of the product, as well as the total units produced and sold. Product Price DM DLHs Hourly Wage-DL Shipping Cost Units Basic $180 $50 1 $10 $2 6,000 Pro $320 $80 2 $12 $4 4,000 The company collected the data for ABC as follows: Activity measures used Estimated OH Activity Cost Pool Activity Measure cost Basic Pro Machine Setup Special Processing Factory Supervision # of setups Machine hours DLH $ 472,500 60 120 $ 360,000 6,000 10,000 $ 224,000 Customer Relation (10 customers) # of customers $ 240,000 4 Under the ABC system, what is the unit product cost for Basic? (Choose the closest amount.) A. $275.00 B. $126.75 C. $124.75 D. $130.75 E. None of the above 5 Batch-level activities include (choose the most complete answer): A. Machine Setup B. Special Processing C. Factory Supervision D. Machine Setup, Special Processing, and Factory Supervision E. Special Processing and Factory Supervision 6 The company has two major customers (A and B), who buy their products in the amounts in the table below. Customer Basic Pro A 800 B 2,000 units 1,200 1,000 units How much is the ABC customer margin of customer B? (Choose the closest amount.) A. $ 127,500 B. $ 135,500 C. D. $ 151,500 $ 159,500 E. None of the above.