Q$\mathrm{.}1)(50$ points$)$ Nivag'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 $12,000$ square feet and Nivag is using only $70\%$ of this capacity.

Nivag records the cost of unused capacity as a separate line item, and not as a product cost.

The following is the budgeted information for Nivag:

Nivag's Netballs Budgeted Costs and Activities

For the Year Ended August $31,2012$

Other budget information follows:

Calculate the budgeted cost per unit of cost driver for each indirect cost pool.

What is the budgeted cost of unused capacity?

What is the budgeted total cost and the cost per unit of resources used to produce $($a$)$

basketballs and $($b$)$ volleyballs?

What factors should Nivag consider if it has the opportunity to manufacture a new line of

footballs?