Cost Accounting
Cost Accounting
15th Edition
ISBN: 9780133428834
Author: Horngren
Publisher: PEARSON
Question
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Chapter 12, Problem 12.21E

1.

To determine

The amount and cost of unused administrative capacity at the beginning of 2013 based on the actual number of customers served.

Given information:

The actual capacity at the beginning is 4,700 customers.

The actual customers used to produce an output are 4,200 customers.

The price per unit of capacity is $380.

2.

To determine

The maximum amount of costs that the firm can save in 2013 by downsizing administrative capacity.

3.

To determine

The factors other than cost that the company should consider before downsizing the administrative capacity.

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