Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a...
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Accounting
Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of units. The variable cost of the sensor is $ per unit, and the fixed costs of the plant are $ annually. Current annual demand is 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 sensors What would be the cost of excess capacity?
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Req A
Req B
Req C
What cost per sensor should the cost system report to facilitate management decision making?
Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar.
Cost per sensor
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