Refer to the Grey Corporation information in Exercise 13-18.

In Exercise 13-18

Required
1. Where possible, calculate the amount and cost of unused capacity for (a) manufacturing, (b) selling and customer service, and (c) design at the beginning of 2015 based on 2015 production. If you could not calculate the amount and cost of unused capacity, indicate why not.
2. Suppose Grey can add or reduce its manufacturing capacity in increments of 30 units. What is the maximum amount of costs that Grey could save by downsizing manufacturing capacity?
3. Grey, in fact, does not eliminate any of its unused manufacturing capacity. Why might Grey not downsize?

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2015 2016 1. Units of D4H produced and sold 2. Selling price 3. Direct materials (kilograms) 4. Direct material cost per kilogram 5. Manufacturing capacity (units of D4H) 6. Total conversion costs 7. Conversion cost per unit of capacity 8. Selng and customer-service capacity 9. Total selling and customer-service costs 10. Selling and customer-service capacity cost per customer 11. Design staff 12. Total design costs 13. Design cost per employee 200 40,000 300,000 8.00 250 $2,000,000 $8,000 100 customers 1,000,000 $10,000 12 1,200,000 $100,000 S42,000 310,000 S8.50 250 $2,025,000 $8,100 95customers $940,500 $9,900 12 S1,212000 $101,000