After reviewing the new activity$-$based costing system that Nancy Chen has implemented at IVCs 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 rellablity. He plans to produce $109,000$ units of the Sport model and $44,500$ 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 Pro products by $34$ percent.