Material usage Information: : A firm currently produces a high-tech medical products with 20 parts. Design engineering has produced a new configuration for the product that requires only eight parts. Current activity capacity and demand (20-part configuration) and expected activity demand (8-part configuration) are provided. Activity Current Activity Expected Activity Activities Activity Driver Capacity Demand Demand Number of parts 200,000 200,000 80,000 Assembling parts Direct labor hours 10,000 10,000 5,000 Purchasing parts Number of orders 15,000 12,500 6,500 Additionally, the following activity cost data are provided: Material usage: $3 per part used; no fixed activity cost. Assembling parts: $12 per direct labor hour; no fixed activity cost. Purchasing parts: Three salaried clerks, each earning a $30,000 annual salary; each clerk i capable of processing 5,000 purchase orders. Variable actiity costs: $0.50 per purchase order processed for forms, postage, etc. Question: Calculate the cost reduction produced and how much is the total savings