Curts Casting manufactures metal parts in a large manufacturing facility. Curts customers order 56,000 tons of castings each quarter. The facility has a practical capacity of 92,000 tons. Curt leased the current facility because it was more convenient than another new facility that had a capacity of 56,000 tons. The annual cost of the facility is $552,000. The variable cost of a casting is $7.

Required:

a. What cost per casting should the cost system report?

b. Given your answer to requirement (a), what is the cost of excess capacity?