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:What cost per sensor should the cost system report to facilitate management decision making?What is the cost of excess capacity?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? **Question:**What is the cost of excess capacity?**Input Field:**Cost of excess capacity [_________] ---*Explanation:*This section on the educational website addresses the concept of "cost of excess capacity," inviting users to input their understanding or calculated cost in the provided text field. There are no graphs or diagrams included in this section. ### Cost System Analysis for Management Decision-MakingIn analyzing the cost per sensor to aid management decision-making, the following system is presented:#### Requirements:- **Req A**- **Req B**- **Req C**#### Query:- **Question:** What cost per sensor should the cost system report to facilitate management decision making?#### Input Field:- **Cost per sensor:** [Input box available for entering the cost]### Explanation:This diagram represents a decision-making interface where managers can input the cost per sensor into a specific field after considering various requirements labeled "Req A," "Req B," and "Req C." By determining the appropriate cost per sensor, this system supports effective decision-making strategies.

A cost accounting system refers to the method or approach used by businesses to determine and track…

Answered: Middle Industries produces a sensor for…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What cost per sensor should the cost system report to facilitate management decision making?
What is the cost of excess capacity?
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?

**Question:**

What is the cost of excess capacity?

**Input Field:**

Cost of excess capacity [_________]

---

*Explanation:*

This section on the educational website addresses the concept of "cost of excess capacity," inviting users to input their understanding or calculated cost in the provided text field. There are no graphs or diagrams included in this section.

### Cost System Analysis for Management Decision-Making

In analyzing the cost per sensor to aid management decision-making, the following system is presented:

#### Requirements:
- **Req A**
- **Req B**
- **Req C**

#### Query:
- **Question:** What cost per sensor should the cost system report to facilitate management decision making?

#### Input Field:
- **Cost per sensor:** [Input box available for entering the cost]

### Explanation:
This diagram represents a decision-making interface where managers can input the cost per sensor into a specific field after considering various requirements labeled "Req A," "Req B," and "Req C." By determining the appropriate cost per sensor, this system supports effective decision-making strategies.

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