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 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 Assembly building Pro Total Assembling Machine-hours Setting up machines 6,600 30,600 37,200 Setup hours 46 Handling material 460 Production runs 506 14 Packaging building 60 Inspecting and packing Direct labor-hours Shipping 62,400 Number of shipments 24,000 86,400 106 318 46 212 Third Quarter Unit Cost Report. Activity-Based Costing-CenterPoint Manufacturing Facility Sport Pro Direct material Direct labor $1,586,600 $2,412,800 Assembly $ 756,800 $ 612,000 Packaging 996, 889 372,888 Total direct labor $1,752, see $984,888 Direct costs $3,258,000 $3,396, eee Overhead Assembly building Assembling (@ 53e per MH) $ 198,000 $ 918,000 Setting up machine (e $900 per setup hour) 41,400 414,888 Handling material (@ $3,800 per run) 42,eee 138,00 Packaging building Inspecting and packing ( 55 per direct laber-hour) 312,000 120,000 Shipping (@$1,32e per shipment) 139.920 279, 84e Total ABC overhead $ 733, 320 $1,869,840 Total ABC cost $3,991,320 $5,265.840 Number of units 106,00 43, eee Unit cost $ 37.65 122.46 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