=+10 Selling and customer-service capacity cost per customer (row 9 ÷ row 8) $10 000 $9 900 Winslow Ltd produces no defective machines but it wants to reduce direct materials usage per D4H machine in 2015. Conversion costs in each year depend on production capacity defined in terms of D4H units that can be produced, not the actual units produced.

Selling and customer-service costs depend on the number of customers that Winslow can support, not the actual number of customers it serves. Winslow has 75 customers in 2014 and 80 customers in 2015.

Required 1 Is Winslow’s strategy one of product differentiation or cost leadership? Explain briefly.