Assume that facility costs are $350,000 per year for a plant occupying 20,000 square feet. The cost per square foot is $17.50. A value stream occupying 10,000 square feet would be assigned a cost of $175,000. If the value-stream manager figures out how to do the same tasks with 5,000 square feet, the cost would be reduced to $87,500. Any unabsorbed facility cost would be:

		deducted from plant as depreciation expenditure.
		deducted from revenue as a separate item.
		deducted from capital as an opportunity cost.
		deducted from rental expenditure in the company's income statement.