Racer X Corporation manufactures two models of motorized go-carts, a standard and a deluxe model. The following activity and cost information has been compiled:

Number of Number of Number of

 

Product Setups Components Direct Labor Hours

 

Standard1510750

Deluxe3515500

Overhead costs$15,000$25,000

12) Racer X hopes to reduce the overhead costs associated with the setups in the long run:

i) By reducing the cost of performing each set up by 20%and

ii) By reducing the setups for standard from 15 to 13 and for deluxe from 35 to 32.

What are the expected savings?