Exercise 9-35 Activity-Based Costing (LO 9-4, 5) After reviewing the new activity-based costing system that Janis McGee has implemented at Joplin Industries's Port Arthur manufacturing facility, Kris Kristoff, 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 103,000 units of J25P and 41,500 units of J40X n the first quarter. He believes that with his more efficient setup routine, he can reduce the number of setup hours for both the J25P and the J4OX products by 28 percent. Direct mnaterial Direct labor S1,503,000 ,406,000 Assembly S 753,000 993 0DD 746,000 S3,249,000 608,000 366,000 Total direct labor Direct costs Assembly building Assembling ($30 per mh) Setting up machine ( 0 per setup hour) Handling material$3,000 per nun) S 186,0DD 37,500 25,5DD 906,000 363,000 123,000 Packaging building Inspecting and Packing (@ $5 per direct labor-hour) Shipping ($1,320 per shipment) Total ABC overhead 306,000 135 DDD 690,0D0 117,000 270,000 3,939,00D $,157,000 Total ABC cost Number of units Unit cost 103 DDD S 38.24 124.27 Required: Compute the amount of overhead allocated to the J25P and the J40X cameras 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. Total ABC 3,928 40X 5,055,360