Exercise $9-33($Static$)$ Activity$-$Based Costing $($LO $9-4,5)$

After reviewing the new activity$-$based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing facility, Tom Spencer, the production supervisor, belleves 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 belleves that with his more efficlent setup routine, he can reduce the number of setup hours for both the Sport and the fro products by one$-$third.

Cost Drivers and Cost Driver Volumes$-$CenterPoint Manufacturing Facility

Third Quarter Unit Cost Report, Activity$-$Based Costing$-$CenterPoint Manufacturing Facility

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

$\backslash$table$[[$$$180,000,$$$900,000$