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Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of 75,000 units. The variable cost of the sensor is $185.00 per unit, and the fixed costs of the plant are $12,375,000 annually. Current annual demand is 55,000 sensors. Middle Industries bought the plant because it was close to its other manufacturing facilities and was available for sale when they were searching for a location. Required: a. What cost per sensor should the cost system report to facilitate management decision making? b. What is the cost of excess capacity? c. What cost per sensor would the cost system report if the smallest manufacturing plant that could be built was able to produce 75,000 sensors? What would be the cost of excess capacity? Complete this question by entering your answers in the tabs below. Req A Req B Req C What cost per sensor should the cost system report to facilitate management decision ma Cost per sensor

Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of 75,000 units. The variable cost of the sensor is $185.00 per unit, and the fixed costs of the plant are $12,375,000 annually. Current annual demand is 55,000 sensors. Middle Industries bought the plant because it was close to its other manufacturing facilities and was available for sale when they were searching for a location. Required: a. What cost per sensor should the cost system report to facilitate management decision making? b. What is the cost of excess capacity? c. What cost per sensor would the cost system report if the smallest manufacturing plant that could be built was able to produce 75,000 sensors? What would be the cost of excess capacity? Complete this question by entering your answers in the tabs below. Req A Req B Req C What cost per sensor should the cost system report to facilitate management decision ma Cost per sensor

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of 75,000 units. The variable cost of the sensor is $185.00 per unit, and the fixed costs of the plant are $12,375,000 annually. Current annual demand is 55,000 sensors. Middle Industries bought the plant because it was close to its other manufacturing facilities and was available for sale when they were searching for a location. Required: a. What cost per sensor should the cost system report to facilitate management decision making? b. What is the cost of excess capacity? c. What cost per sensor would the cost system report if the smallest manufacturing plant that could be built was able to produce 75,000 sensors? What would be the cost of excess capacity? Complete this question by entering your answers in the tabs below. Req A Req B Req C What cost per sensor should the cost system report to facilitate management decision ma Cost per sensor
Transcribed Image Text:Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of 75,000 units. The variable cost of the sensor is $185.00 per unit, and the fixed costs of the plant are $12,375,000 annually. Current annual demand is 55,000 sensors. Middle Industries bought the plant because it was close to its other manufacturing facilities and was available for sale when they were searching for a location. Required: a. What cost per sensor should the cost system report to facilitate management decision making? b. What is the cost of excess capacity? c. What cost per sensor would the cost system report if the smallest manufacturing plant that could be built was able to produce 75,000 sensors? What would be the cost of excess capacity? Complete this question by entering your answers in the tabs below. Req A Req B Req C What cost per sensor should the cost system report to facilitate management decision ma Cost per sensor
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