Identifying and managing unused capacity (continuation of 12-31). Refer to the infor...

Identifying and managing unused capacity (continuation of 12-31). Refer to the information for Scott Company in Problem 12-31.

1. Calculate the amount and cost of (a) unused manufacturing capacity and (b) unused selling and customer-service capacity at the beginning of 2013 based on actual production and actual number of customers served in 2013.

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 2013 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 not downsize?