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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 $100,000$ units of the Sport model and $40,000$ 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

$\backslash$table$[[$Activity$,$Cost Driver,Cost Driver Volume$],[$Sport$,$Pro,Total$],[$Assembly building$],[$As sembling,Machine$-$hours,$6,000,30,000,36,000],[$Setting up machines,Setup hours,$40,400,440],[$Handling material,Production runs,$8,40,48],[$Packaging building$],[$Inspecting and packing,Direct labor$-$hours,$60,000,22,800,82,800],[$Shipping$,$Number of shipments,$100,200,300]]$

Third Quarter Unit Cost Report, Activity$-$Based Costing$-$CenterPoint Manufacturing Facility