Nike Inc. uses ABC to allocate overhead in its footwear division. In April 2040, the following data is provided:

• Activity 1: Machine Hours (10,000 hours, $200,000)
• Activity 2: Inspection Hours (5,000 hours, $100,000)
• Activity 3: Setup Costs (50 setups, $150,000)

Requirements:

• Allocate overhead costs to each activity.
• Calculate the cost per activity driver.
• Prepare a report on the cost per unit for a specific product.
• Recommend process improvements based on the ABC analysis.