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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2011 2012 1. Units of Maxus produced and sold 2. Selling price 3. Direct materials used (kits) 4. Direct material cost per kit 5. Manufacturing capacity in units 8,000 $95 10,000 $32 14,000 11,000 $80 11,000 $32 13,000 $260,000 $20 90 customers $16,200 $180 6. Total conversion costs 7. Conversion cost per unit of capacity (row 6 row 5) 8. Sellng and customer-service capacity 9. Total selling and customer-service costs 10. Selling and customer-service capacity cost per $280,000 $20 90 customers $13,500 $150 customer (row 9 row 8)