Larman'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 17,000 square feet, and Larman 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 is the budgeted information for Larman: (Click the icon to view the budgeted information.) (Click the icon to view other information.) Read the requirements. 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 Setup Cost 81,000 102,500 221,000 Total quantity of cost driver 450 25,000 17,000 = = $ = $ = $ Cost driver rate 180.00 per setup 4.10 per machine hour 13.00 per square foot $ Equip. and Maint. Lease rent, etc. Requirement 2. What is the budgeted cost of unused capacity? Select the formula you will use, then calculate the cost of unused capacity. Cost driver rate X Unused capacity = Cost of unused capacity i Data Table . X Larman's Netballs Budgeted Costs and Activities For the Year Ended December 31, 2017 Direct materialsbasketballs Direct materialsvolleyballs Direct manufacturing labor-basketballs Direct manufacturing labor-volleyballs Setup Equipment and maintenance costs 224,600 532,600 98,500 96,200 81,000 102,500 221,000 Lease rent 1,356,400 Total Print Done 0 Data Table Other budget information follows: Number of balls Machine-hours Number of setups Square footage of production space used Basketballs 59,000 12,000 250 3,300 Volleyballs 120,000 13,000 200 10,300 0 Requirements - X 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 Larman? What are some of the issues Larman should consider before increasing production to use the space