After reviewing the new activity-based costing system that Nancy Chen has implemented at VC'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 106,000 units of the Sport model and 43.000 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 31 percent. Cost Drivers and Cost Driver Volumes-CenterPoint Manufacturing Facility Cost Driver Volume Activity Cost Driver Sport Pro Total Assembly building Assembling Machine-hours 6,600 30,609 37,200 Setting up machines Setup hours 46 460 586 Handling material Production runs 14 46 60 Packaging building Inspecting and packing Direct labor-hours 62,400 24,000 86,400 Number of shipments 106 212 318 Shipping Third Quarter Unit Cost Report. Activity-Based Costing-CenterPoint Manufacturing Facility Sport Pro Direct material $1,506,00 $2,412, ede Direct labor Assembly $ 956,800 $ 612, 80e Packaging 996,000 372,eee Total direct labor $1 252 1$ 984,000 Direct costs $3,258, aga $3.396, dee Overhead Assembly building Assembling (e $30 per ) $198.de $ 918, eee Setting up machine (@ $900 per setup hour) 41,400 414, eos Handling material ($3,000 per run) 42, Dee 138,000 Packaging building Inspecting and packing @ $5 per direct labor-hour) 1912 ede 120,898 Shipping @ $1,920 per shipment) 132920 279,848 Total ABC overhead za $1869 84e Total ABC cost 91,20 $5269,848 Number of units 1e5de 13 de Unit cost 2.85 12246 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 4