Question

Ramo & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Ramo wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Ramo T-shirt. Ramo presents the following data for its first two years of operations, 2016 and 2017. Click the icon to view the data.) Read the requirements. Requirement 1. Calculate the amount and cost of unused administrative capacity at the beginning of 2017. based on the actual number of customers Ramo served in 2017. First select the formula, then enter the appropriate amounts to calculate cost of unused administrative capacity at the beginning of 2017. = Cost of unused capacity Requirements Calculate the amount and cost of unused administrative capacity at the beginning of 2017, based on the actual number of customers Ramo served in 2017. Suppose Ramo can only add or reduce administrative capacity in increments of 250 customers. What is the maximum amount of costs that Ramo can save in 2017 by downsizing administrative capacity? What factors, other than cost, should Ramo consider before it downsizes administrative capacity? 3. What Print Done

Answer 1

Refer to the below images for the above mentioned questions, in a detailed way of solution with explanation.

a Dealsifenment beginning The of amount and cost year 2017, based of unused on year 2014 capacity needs at the follows: Darticulars Amount of unused са расу Cost of unosed capacity Administrative, 500 $166000 [4100-3600] [4100-3600]x $320 Requirement Ramo can reduce administrative capacity by another 250 [3850 - 3600] customers ie, 350-250 = 3600 actual Customers. Ramo will save another 2504 $320 = $ 80000 This is the maximum amount of costs Ramo can save in 2017, in addition to the 80000 ($320x250 customers) that Damo already saved when down sizing from 4100 customers to 3850 costomess- Requirement A ③ Before Ramo downsizes administrative capacity, It should consider whether sales increases in the future would lead to a greater demand for and utilization of capacity as new costmers are drawn to Ramos distinctive Products at that point, customer Sexice may be the key to new costomers retention is for ther growth Also, the market feed back often provided by customer service staff is probably way to Ramo's cutting edge fashion Strategy; Some of this may be lost it administrative capacity a eut back . In In addition, addition Significant reductions in Capacity usually mean loying out people white hort employee morale -