Calculate the total annual cost included in the cutting activity cost pool assuming the cutting tool is purchased.

Chad Davis, C\&C Sports' vice president for operations, recently received a sales brochure for a new electric cutting tool. Based on the tool's specifications, Chad believes that C\&C Sports could increase the batch size on jersey production to 50 jerseys, up from the current 35 jerseys. While the cutting tool would be used on pants and award jackets as well, other production factors prevent increasing the batch sizes for these products. The new tool would increase annual operating costs by $19,698. Before deciding whether to purchase the cutting tool, Chad wants to