Exercise 9-33 (Algo) Activity-Based Costing (LO 9-4, 5) 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 113,000 units of the Sport model and 46,500 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 Assembling Setting up machines Handling material Cost Driver Machine-hours Setup hours Production runs Cost Driver Volume Sport Pro Total 7,300 53 21 31,300 530 53 38,600 583 74 65,200 25,400 113 226 90,600 339 Third Quarter Unit Cost Report, Activity-Based Costing-CenterPoint Manufacturing Facility Packaging building Inspecting and packing Shipping Direct labor-hours Number of shipments