Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of $75,000$ units. The variable cost of the sensor is $$185\mathrm{.}00$ per unit, and the fixed costs of the plant are $$12,375,000$ annually. Current annual demand is $55,000$ sensors$.$ Middle Industries bought the plant because it was close to its other manufacturing facilities and was available for sale when they were searching for a location.

Required:

a$.$ What cost per sensor should the cost system report to facilitate management decision making?

b$.$ What is the cost of excess capacity?

c$.$ What cost per sensor would the cost system report if the smallest manufacturing plant that could be built was able to produce $75,000$ sensors$?$ What would be the cost of excess capacity?

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Req A

Req C

What cost per sensor should the cost system report to facilitate management decision making?

Cost per sensor

$

$350$

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What is the cost of excess capacity?

Cost of excess capacity

$$3,300,000$

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What cost per sensor would the cost system report if the smallest manufacturing plant that could be built was able to produce $75,000$ sensors$?$ What would be the cost of excess capacity?

$\backslash$table$[[,$Cost$],[$Cost per sensor$,$$$,350],[$Cost of excess capacity,$$,75,000]]$