1: Let the costs of Party A and Party B be x y yuan respectively. X+y=500 and 90% * (1+50%) x+90% * (1+40%) y-x-y =157.

x=300 y=200

2. Profit amount: (a-21) (350-10a) = 400.

Solve the unary quadratic equation x=25 or 3 1, and then exclude 3 1 as the price increase does not exceed 20% of the purchase price. So x=25.