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 114,000 units of the Sport model and 47,000 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 Cost Driver Sport Cost Driver Volume Pro Total Assembling Setting up machines Machine-hours Setup hours 7,400 Handling material Production runs 54 22 31,400 540 54 38,800 594 76 Packaging building Inspecting and packing Shipping Direct labor-hours Number of shipments 65,600 25,600 114 228 91,200 342 Third Quarter Unit Cost Report, Activity-Based Costing-CenterPoint Manufacturing Facility Direct material Direct labor Sport $ 1,514,000 Assembly Packaging $ 764,000 1,004,000 Pro $ 2,428,000 $ 628,000 388,000 Direct material Direct labor Assembly Packaging Total direct labor Direct costs Overhead Sport $ 1,514,000 $ 764,000 1,004,000 $ 1,768,000 $ 3,282,000 Pro $ 2,428,000 $ 628,000 388,000 $ 1,016,000 $ 3,444,000 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: $ 222,000 48,600 66,000 328,000 150,480 $ 815,080 $ 4,097,080 $ 942,000 486,000 162,000 128,000 300,960 $ 2,018,960 $ 5,462,960 114,000 47,000 $ 35.94 $ 116.23 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. Total ABC Model 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 Sport Pro $ Total ABC Overhead 799,042