Zarson'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 11,000 square feet and Zarson is using only 60% of this capacity. Zarson records the cost of unused capacity as a separate line item and not as a product cost. The following is the budgeted information for Zarson: (Click the icon to view the budgeted information.) (Click the icon to view other information.) Read the Zarson's Netballs Budgeted Costs and Activities For the Year Ended December 31, 2017 Direct materials-basketballs Direct materials-volleyballs Direct manufacturing labor-basketballs Direct manufacturing labor-volleyballs Setup Equipment and maintenance costs Lease rent Total s 240,501o 600,200 111,800 95,600 144,000 107,100 143,000 1,442,200 Other budget information follows: Number of balls Machine-hours Number of setups Square footage of production space used Basketballs 65,000 12,500 350 3,400 Volleyballs 120,000 13,000 250 3,200 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 Zarson? What are some of the issues Zarson should consider before increasing production to use the space