2. Dexman's Netballs is a manufacturer of high-quality basketballs and volleyballs. Setup costs are driven by the number of batches. Equipment and maintenance costs increase with the number of machine-hours, and lease rent is paid per square foot. Capacity of the facility is 12,000 square feet, and Dexman is using only 80% of this capacity. Dexman records the cost of unused capacity as a separate line item and not as a product cost. The following is the budgeted information for Dexman: (Click the icon to view the budgeted information.) Tor 2 (Click the icon to view other information.) iver Read the requirements. nte Requirement 1. Calculate the cost per unit of cost driver for each indirect cost pool. Select the formula you will use, then calculate the cost driver rate. (Round your answers to the nearest cent. Abbreviations used: "equip." = equipment, "maint." = maintenance.) (1) 1 (2) = Cost driver rate Setup Equip. and Maint Lease rent, etc. |(4) Requirement 2. What is the hudanti Lequirement 2. What is the budgeted cost of unused capacity? Select the formula you will use, then calculate the cost of unused capacity. (6) = Cost of unused capacity Requirement 3. What is the budgeted total cost and the cost per unit of resources used to produce (a) basketballs and (b) volleyballs? (Enter the cost per unit to the nearest cent.) Basketballs Volleyballs Direct materials Direct manufacturing labor Setup Equipment and maintenance Lease rent, etc. Budgeted total costs Total Clear All Lease rent, etc. Budgeted total costs Total or ver Number of units Budgeted cost per unit Requirement UuuuUL PO Requirement 4. Why might excess capacity be beneficial for Dexman? What are some of the issues Dexman should consider before increasing production to use the space? Why might excess capacity be beneficial for Dexman? (Select all that apply.) A. The excess capacity could allow for expanded production of either of the existing models. B. The excess capacity is costing Dexman money and, therefore, cannot be beneficial to Dexman. C. Having excess capacity allows for the company to accept special orders if they are received D. The company could consider adding a new product line. What are some of the issues Dexman should consider before increasing production to use the space? (Select all that apply.) A. The company should considering how much they could take in in rent if they opt to rent out the unused space. B. The company should consider the capital investment needed to start and support a new product line, as well as the demand for a new product. C. The company should consider if there is available labor and machine hours before increasing production to use the space. D. None of the above. Ans Dexman's Netballs Budgeted Costs and Activities For the Year Ended December 31, 2017 Direct materials-basketballs $ Direct materials-volleyballs Direct manufacturing labor-basketballs Direct manufacturing labor-volleyballs Setup Equipment and maintenance costs 213,690 383,570 110,400 100,640 120,000 102,900 156,000 Lease rent Total 1,187,200 2: Data Table Other budget information follows: Basketballs Number of balls Machine-hours Number of setups Square footage of production space used 57,000 12,000 450 3,270 Volleyballs 85,000 12,500 350 6,330 3: Requirements 1. Calculate the budgeted cost per unit of cost driver for each indirect cost pool. 2. What is the budgeted cost of unused capacity? 3. What is the budgeted total cost and the cost per unit of resources used to produce (a) basketballs and (b) volleyballs? 4. Why might excess capacity be beneficial for Dexman? What are some of the issues Dexman should consider before increasing production to use the space
