Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of $84,000$ units. The variable cost of the sensor is $$194$ per unit, and the fixed costs of the plant are $$13,860,000$ 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 $84,000$ sensors$?$ What would be the cost of excess capacity?

Complete this question by entering your answers in the tabs below.

Req A

Req B

Req C

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

Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar.

Cost per sensor