Zwahlen Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. Costs in the Processing cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company's costs and activity-based costing system appear below:

Activity Cost Pools

Processing	$	58,600
Setting Up	$	16,900
Other	$	29,900

	MHs	Batches
Product D7	9,400	900
Product H0	13,400	1,500
Total	22,800	2,400

	Product D7		Product H0
Sales (total)	$	222,300	$	308,100
Direct materials (total)	$	74,000	$	146,600
Direct labor (total)	$	106,540	$	97,600

Required:

a. Calculate activity rates for each activity cost pool using activity-based costing.

Activity Cost Pools	Activity Rate
Machining		per MH
Setting up		per batch

b. Determine the amount of overhead cost that would be assigned to each product using activity-based costing.

	Amount of Overhead Cost
Product D7
Product H0

c. Determine the product margins for each product using activity-based costing.

	Product Margin
Product D7
Product H0