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SC Saved Hel Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate compl After reviewing the new activity-based costing system that Nancy Chen has Implemented at IVC's CenterPoint manufacturing facility. Tom Spencer, the production supervisor, belleves 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 Activity Assembly building Assembling Setting up machines. Handling material Packaging building Inspecting and packing Shipping Cost Oriver Sport Cost Driver Volume Pro Total Machine-hours Setup hours 6,000 Production runs 40 8 30,000 400 40 36,000 440 48 Direct labor-hours Number of shipments 60,000 100 22,800 200 82,800 300 Third Quarter Unit Cost Report, Activity-Based Costing-CenterPoint Manufacturing Facility Direct material Packaging Direct labor Assembly Total direct labor Direct costs Overhead Assembly building Assembling (@ $30 per MH) Setting up machines (@ $900 per setup hour) Sport $1,500,000 $750,000 990,000 $1,740,000 $ 3,240,000 $ 180,000 36,000 Pro $2,400,000 $600,000 360,000 $960,000 $3,360,000 $500,000 360,000

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