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 100,000 units of the Sport model and 40,000 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 25 percent Cost Drivers and Cost Driver Volumes-CenterPoint Manufacturing Facility Cost Driver Volom Activity Cost Reizen Pro Assembly building Assembling Machine-hours 6,600 30.000 Setting up machines Handling material Production runs Packaging building Inspecting and packing Direct labor-hours 60,000 22,800 Shipping Sport Total Setup hours 36,00 400 40 . 400 40 Number of shipments 82,000 300 100 200 Thud Quarter Unit Cost Report Activity-Based Costing-CenterPoint Manufacturing Facility Sport Pro Direct material $1,500,000 $2,400,000 Direct labor Assembly $750,000 5600,000 Packaging 990 000 360.000 Total direct labor $1,740.ee 5960,000 birect costs 53240,000 $360,000 31.740.000 $3,240,000 $900,000 53.360.000 $ 130,000 36.000 26,000 $ 900.000 360.000 120,000 Total direct labor Direct costs Overhead Assembly building Assembling (e $30 per ) Setting up machine ( 5900 per setup hour) Handling material ( 55,000 per run) Packaging building Inspecting and packing (@ss per direct labor-hour) Shipping (51,320 per shipment) Total ABC overhead Total ABC cost Number of units Unit cost 300,000 132,000 5672.000 $3,912,00 100,000 39.12 114,000 264.00 $1,750,000 $5,118,000 40, $ 122.95 Required: 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