Refer to Exercise 12-26.

Required:
1. Calculate the amount and cost of unused software-implementation support capacity at the beginning of 2013, based on the number of jobs actually done in 2013.
2. Suppose Southland can add or reduce its software-implementation support capacity in increments of 10 units. What is the maximum amount of costs that Southland could save in 2013 by downsizing software-implementation support capacity?
3. Southland, in fact, does not eliminate any of its unused software-implementation support capacity. Why might Southland not downsize?

Data From Exercise 12-26:
Southland Corporation is a small information systems consulting firm that specializes in helping companies implement standard sales-management software. The market for Southland’s services is very competitive. To compete successfully, Southland must deliver quality service at a low cost. Southland presents the following data for 2012 and 2013.

Software-implementation labor-hour costs are variable costs. Software-implementation support costs for each year depend on the software-implementation support capacity Southland chooses to maintain each year (that is, the number of jobs it can do each year). Software-implementation support costs do not vary with the actual number of jobs done that year.