After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing...

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After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing facility, Tom Spencer, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 104,000 units of the Sport model and 42,000 units of the Pro model in the first quarter. He believes that with his more efficient setup routine, he can reduce the number of setup hours for both the Sport and the Pro products by one-third. Cost Drivers and Cost Driver Volumes-CenterPoint Manufacturing Facility Activity Assembly building Assembling Cost Driver Sport Cost Driver Volume Pro Total Setting up machines Handling material Packaging building Inspecting and packing Shipping Machine-hours Setup hours Production runs Third Quarter Unit Cost Report, Activity-Based Costing-CenterPoint Manufacturing Facility 6,400 44 12 30,400 440 44 36,800 484 56 Direct labor-hours Number of shipments 61,600 23,600 104 208 85,200 312 Direct material Direct labor Assembly Packaging Total direct labor Direct costs Overhead Assembly building Assembling (@ $30 per MH) Setting up machines (@ $900 per setup hour) Handling material (@ $3,000 per run) Packaging building Inspecting and packing (@ $5 per direct labor-hour) Shipping (@ $1,320 per shipment) Total ABC overhead Total ABC cost Number of units Unit cost Required: Pro Sport $ 1,504,000 $ 754,000 994,000 $ 1,748,000 $ 3,252,000 $ 192,000 39,600 36,000 308,000 137,280 $ 712,880 $ 3,964,880 104,000 $ 38.12 $ 2,408,000 $ 608,000 368,000 $ 976,000 $ 3,384,000 $ 912,000 396,000 132,000 118,000 274,560 $ 1,832,560 $ 5,216,560 42,000 $ 124.20 a. Compute the amount of overhead allocated to the Sport and the Pro drones for the first quarter using activity-based costing. Assume that all events are the same in the first quarter as in the third quarter except for the number of setup hours. Assume the cost of a setup hour remains at $900. Model Total ABC Overhead Sport Pro After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing facility, Tom Spencer, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 104,000 units of the Sport model and 42,000 units of the Pro model in the first quarter. He believes that with his more efficient setup routine, he can reduce the number of setup hours for both the Sport and the Pro products by one-third. Cost Drivers and Cost Driver Volumes-CenterPoint Manufacturing Facility Activity Assembly building Assembling Cost Driver Sport Cost Driver Volume Pro Total Setting up machines Handling material Packaging building Inspecting and packing Shipping Machine-hours Setup hours Production runs Third Quarter Unit Cost Report, Activity-Based Costing-CenterPoint Manufacturing Facility 6,400 44 12 30,400 440 44 36,800 484 56 Direct labor-hours Number of shipments 61,600 23,600 104 208 85,200 312 Direct material Direct labor Assembly Packaging Total direct labor Direct costs Overhead Assembly building Assembling (@ $30 per MH) Setting up machines (@ $900 per setup hour) Handling material (@ $3,000 per run) Packaging building Inspecting and packing (@ $5 per direct labor-hour) Shipping (@ $1,320 per shipment) Total ABC overhead Total ABC cost Number of units Unit cost Required: Pro Sport $ 1,504,000 $ 754,000 994,000 $ 1,748,000 $ 3,252,000 $ 192,000 39,600 36,000 308,000 137,280 $ 712,880 $ 3,964,880 104,000 $ 38.12 $ 2,408,000 $ 608,000 368,000 $ 976,000 $ 3,384,000 $ 912,000 396,000 132,000 118,000 274,560 $ 1,832,560 $ 5,216,560 42,000 $ 124.20 a. Compute the amount of overhead allocated to the Sport and the Pro drones for the first quarter using activity-based costing. Assume that all events are the same in the first quarter as in the third quarter except for the number of setup hours. Assume the cost of a setup hour remains at $900. Model Total ABC Overhead Sport Pro