Identifying and managing unused capacity (continuation of 13-18). Refer to Exercise 13-18.

1. Calculate the amount and cost of (a) unused administrative capacity and (b) unused design capacity at the beginning of 2009, based on information for 2009. If you are unable to calculate the amount and cost of a particular unused capacity, indicate why not.

2. Suppose Oceano can only add or reduce administrative capacity in increments of 200 customers. What is the maximum amount of costs that Oceano can save in 2009 by downsizing administrative capacity?

3. What factors, other than cost should Oceano consider before it downsizes administrative capacity?