Question

Refer to the information for Scott Company in Problem 14- 25.


Required
1. Calculate the amount and cost of
(a) Unused manufacturing capacity and
(b) Unused selling and customer-service capacity at the beginning of 2012 based on actual production and actual number of customers served in 2012.
2. Suppose Scott can add or reduce its selling and customer- service capacity in increments of five customers. What is the maximum amount of costs that Scott could save in 2012 by downsizing selling and customer-service capacity?
3. Scott, in fact, does not eliminate any of its unused selling and customer- service capacity. Why might Scott notdownsize?


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  • CreatedJanuary 15, 2015
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