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 $14,082. Before deciding whether to purchase the cutting tool, Chad wants to know how the new tool will affect the cost of producing the company's three products. Budgeted Units per Cut per production Batch Batch Pants erseys ackets 183,500 66,500 18,000 50 35 Chenille Machine Costs Product Warehousing/ Pa Traceable to Jackets $ 2,514 Design Cutting Sewing GeneraTota Indirect labor $40,000 40,000 7,396 110,869 $ 7,500 S 15,000 $105,986 S 211,000 46,184 511,300 110,000 110,000 58,330 55,000 41,436 $147,108 $206,820 $292,271 $1,033,250 34,696 135,861 101,064 4,092 Indiroct matorials 125,994 37,512 Rent 41,330 17,000 55,000 4,285 6,377 $83,889 Other 12,297 $170,562 3,747 14,730 Total $132,600 Total Cost Total Activity Activity Rate (A) (B) Product dosign Warehousing/ S 83,889 3 product lines 27,963 por product line $170,562 $147,108 $206,820 9,170 batches 56,580 cuts 86,175 direct labor hours $18.60 per batch $2.60 per cut $2.40 per direct labor hour Cutting