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Laman's Netballs is a manufacturer of high-quality basketballs and volleyballs Setup costs are driven by the number of setups Equipment and maintenance costs increase
Laman's Netballs is a manufacturer of high-quality basketballs and volleyballs Setup costs are driven by the number of setups Equipment and maintenance costs increase with the number of machine-hours, and lea per square foot. Capacity of the facility is 10,000 square feet, and Laman is using only 80% of this capacity Larman records the cost of unused capacity as a separate line item and not as a product cost. The following budgeted information for Larman (Click the icon to view the budgeted information) (Click the icon to view other information) Read the requirements Budgeted total costs Number of units Budgeted cost per unit 407.200 5 58,000 1,106,000 $ 1,593,200 140,000 8.40 5 790 Requirement 4. Why might excess capacity be beneficial for Larman? What are some of the issues Laman should consider before increasing production to use the space? Why might excess capacity be beneficial for Laman? (Select all that apply A. Having excess capacity alows for the company to accept special orders if they are received B. The excess capacity could allow for expanded production of either of the existing models DC The excess capacity is costing Laman money and therefore, cannot be beneficial to Laman D. The company could consider adding a new products
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