This assignment has two keys: #1 and #4. There are two inbetweens #2 and 3.
You are to draw 2 inbetweens. #2 is half and #3 is a favor into Key 4.
The favor inbetween is a new aspect that you may not have dealt with up to this point.
The action is of a wooden mallet hitting a surface. The cushon is used to soften the hit point slightly and provide a contrast between the contact point (on the favor) and the squished key. You would only shoot the favor for one frame, so it doesn't slow the action down. We'll be doing more favors on some other assignments.
The spacing of a favor is not a half way inbetween, it's closer to the key.
On any inbetweening assignment, you always follow the timing chart as far as the order of completion. The half way inbetween is always done first, then you do the next half way into a key, in this case it would be 3, the favor.
Whenever you start to do an inbetween be sure you understand what the action is. In this case, the mallet is swinging down hard to hit the surface. It's a very fast action. Because the distance is pretty big as well, you'd probably do a smear for #2.
The favor should show the mallet as though it's just resting on the surface without any compression or at the very least, a slightly thicker bottom on the surface than at the top.
Be sure to consider the path of action - make it an arc and use it on both inbetweens. I've provided a breakdown for the placement of the handle and a light indication of the path of action.
See my inbetweens